Question
The exporter is provided finance for the purchase of
raw materials and processing them into finished products, this type of finance is calledSolution
The exporter is provided finance even for the purchase of raw materials and processing them into finished products but this finance can be provided only when the exporter has firm order from the importer and the importer has also given an anticipatory Letter of Credit from his bank. So, against the export order received from the importer, the exporter is given finance by his bank which is called pre-shipment export finance.
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