馃嚙馃嚛 Bangladesh 路 Category 8 of 9
Trade Finance Providers
Exporters access foreign-currency input financing through Bangladesh Bank schemes and commercial bank instruments like back-to-back LCs and export credit.
Overview
Financing an export order in Bangladesh usually starts with your commercial bank (an Authorised Dealer bank) and a confirmed order or Letter of Credit. The classic structure for manufacturer-exporters is the back-to-back LC: against your buyer's export LC, your bank opens an import LC for the raw materials you need. To fund the foreign-currency side, banks draw on the Bangladesh Bank Export Development Fund (EDF), a central-bank revolving fund that on-lends US dollars to exporters for input imports at concessional rates; Bangladesh Bank has also introduced a taka-based Export Facilitation Pre-finance Fund (EFPF). Other tools include packing credit (pre-shipment finance), export bill discounting/negotiation (post-shipment), and export credit guarantee cover through Sadharan Bima Corporation. For a small exporter the practical route is to build a relationship with an AD bank, keep your EXP forms and proceeds realisation clean, and ask specifically about EDF/EFPF eligibility and current lending ceilings, which Bangladesh Bank adjusts periodically.
Key requirements
- 1
Authorised Dealer bank relationship
Route export LCs, EXP forms and proceeds through an AD bank; this is the gateway to all central-bank refinance schemes.
- 2
Back-to-back LC facility
Open import LCs for inputs against a confirmed export LC, funded in foreign currency via EDF where eligible.
- 3
EDF / EFPF pre-finance
Access Bangladesh Bank's Export Development Fund (USD) or Export Facilitation Pre-finance Fund (BDT) subject to current ceilings and eligibility.
- 4
Pre- and post-shipment credit
Use packing credit before shipment and bill discounting/negotiation after shipment to bridge the working-capital gap.
- 5
Export credit guarantee
Consider Export Credit Guarantee Scheme cover from Sadharan Bima Corporation to insure against buyer non-payment.
Documents you will need
- Export LC or confirmed sales contract
- EXP form registered with the AD bank
- Back-to-back import LC application
- Proforma invoice for input imports
- Audited financial statements / bank facility application
- ERC and trade licence
- Proceeds realisation certificate (for track record)