Preshipment Packing Credit

Preshipment Packing Credit (PPC) is a type of short-term loan provided by The Eminence Capital to exporters to finance the cost of packing, labeling, and assembling goods prior to their shipment. It is a form of working capital finance that helps exporters meet their immediate financial requirements in the pre-shipment stage.

Here are some key details about Preshipment Packing Credit:

• Purpose: PPC is specifically designed to provide funds for activities related to the preparation and packaging of goods for export. It covers expenses such as procurement of raw materials, processing, manufacturing, and packing of goods.


• Eligibility Exporters, including manufacturers, merchant exporters, and trading houses, are eligible to avail of Preshipment Packing Credit. The exporter must have a firm export order or a letter of credit in their favor.


• Types of PPC: There are two types of Preshipment Packing Credit:
  
  a. Pre-shipment Credit in Foreign Currency (PCFC): This type of credit is denominated in a foreign currency, usually the currency of the destination country. It helps exporters to manage their foreign currency requirements and protect against exchange rate fluctuations.
  b. Pre-shipment Credit in Indian Rupees (PCR): 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 PPC depends on various factors such as the value of the export order, the cost of raw materials, packaging, and other relevant expenses. Banks generally offer a certain percentage of the total value of the export order as Preshipment Packing Credit.


• Repayment: The repayment of Preshipment Packing Credit is typically done through the proceeds of the post-shipment stage. Once the exporter receives payment for the exported goods, they can repay the loan along with any applicable interest.


• Interest Rate: The interest rate for PPC 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 Preshipment Packing Credit. These documents may include export order or letter of credit, packing list, proforma invoice, shipping instructions, and other relevant export-related documents.

Preshipment Packing Credit plays a vital role in facilitating smooth export operations by providing exporters with the necessary funds to prepare and package goods before shipment. It helps exporters meet their financial obligations and ensures timely delivery of quality goods to the overseas market.