Post Shipment Credit

Post Shipment Credit refers to a type of loan or credit facility provided by The Eminence Captial to exporters after the shipment of goods. It is a form of working capital finance that helps exporters bridge the gap between the shipment of goods and the receipt of payment from the overseas buyer. Post Shipment Credit facilitates the management of export receivables and provides liquidity to exporters.

Here are some key details about Post Shipment Credit:

• Purpose: The primary purpose of Post Shipment Credit is to provide funds to exporters to meet their financial requirements after the shipment of goods. It covers the period from the shipment of goods to the realization of export proceeds. The credit can be used for various purposes, including financing production-related expenses, meeting working capital needs, and fulfilling financial obligations.


• Eligibility: Exporters, including manufacturers, merchant exporters, and trading houses, are eligible to avail Post Shipment Credit. The exporter must have a valid export order or a letter of credit and must have completed the shipment of goods.


• Types of Post Shipment Credit:
  a. Post Shipment Credit in Foreign Currency (PSCFC): This type of credit is denominated in a foreign currency. It helps exporters manage their foreign currency receivables and protects against exchange rate fluctuations.
  b. Post Shipment Credit in Indian Rupees (PSCR): This type of credit is denominated in Indian Rupees. It is suitable when the exporter's transactions are primarily in the domestic currency.


• Loan Amount: The loan amount for Post Shipment Credit is typically determined based on the value of the export invoice or bill of exchange. Banks generally offer a certain percentage of the invoice value as Post Shipment Credit, typically up to 90% or 95% of the invoice amount.


• Repayment: The repayment of Post Shipment Credit is typically linked to the export proceeds. Once the exporter receives payment from the overseas buyer, they are required to repay the loan along with any applicable interest and charges. The repayment period is generally predetermined and specified in the loan agreement.


• Interest Rate: The interest rate for Post Shipment Credit may vary based on factors such as the exporter's creditworthiness, prevailing market rates, and the tenure of the loan. It is important to check with the bank or financial institution for the specific interest rates and applicable charges.


• Documentation: Exporters need to submit certain documents to avail Post Shipment Credit. These documents may include export invoice, bill of exchange, shipping documents, insurance documents, customs documents, and other relevant export-related documents. The bank or financial institution may also require additional documentation as per their internal policies.

Post Shipment Credit plays a crucial role in supporting exporters by providing them with liquidity and financial flexibility during the post-shipment stage. It enables exporters to manage their cash flow, fulfill their financial obligations, and focus on expanding their export business. It is important for exporters to choose a reliable financial institution and understand the terms and conditions of the credit facility to ensure smooth operations and timely repayment.