Buyers Credit by EXIM Bank


Under this scheme, the EXIM Bank finances and facilitates project exports from India by way of extending buyers credit facility to overseas sovereign governments and government owned entities. The overseas buyer will get the facility in relation to import of goods and services from India on deferred credit.

Buyer’s credit is a financing mechanism that provides a safe mode of nonrecourse financing option to Indian exporters and serves as an effective market entry tool.

Indian exporters can obtain payment of eligible value from EXIM Bank, without recourse to them, against negotiation of shipping documents.

EXIM bank obtains credit insurance cover under National Export Insurance Account through ECGC. The cost of insurance is borne by the project exporters. Interest differentiates on the credit (in case interest rate is below market rate) will bear by exporter.

The EXIM bank assesses the request of the Indian Exporter on the basis of the past track record of it, the relation with the country where project will be executed, soundness of the financials of the project exporter, confirmation of Reserve Bank of India & other authorities where ever required etc.

The amount of facility is normally not more than 85% of the value of contract under consideration. The rate of interest depends on the assessment done by the bank in case to case basis. Door-to-door tenure is normally in the range of 5-8 years but more time may be given in cases where project is of such kind which could not be completed in the given time frame, adverse conditions out of the control of the exporter etc.

To secure the transaction EXIM may ask for guarantee of government and central bank of the country where the project to be executed. Additional security may be call off which depends on the relation with the borrower and the Indian exporter.


  1. Indian exporter executes commercial contract with overseas buyer.
  2. Indian exporter approaches EXIM Bank to seek Buyer’s Credit as per terms agreement.
  3. EXIM Bank undertakes due diligence on overseas buyer.
  4. EXIM Bank approaches ECGC for in principle approval, cover and premium rates.
  5. ECGC, upon approval under National Insurance Export Account (NEIA), conveys in‐principle approval and rate of premium.
  6. For cases where credit requirement exceeds USD 20 mn, EXIM Bank approaches Working Group to seek approval.
  7. Upon due consideration, Working Group (EXIM Bank, RBI, ECGC and Sponsoring Bank) accords approval.
  8. EXIM Bank accords approval of Buyer’s credit to overseas buyer.
  9. EXIM Bank and ECGC sign Buyer’s Credit policy agreement.
  10. On due date Indian exporter ship the goods/provides the services to the buyer as per commercial agreement between them.
  11. Indian exporter submits the original export documents with EXIM bank and claims disbursement
  12. EXIM Bank will negotiate documents under Letter of Credit or payments will be made to exporter against payment authorizations.
  13. EXIM Bank remits the eligible amount of disbursement to Indian exporter.
  14. EXIM Bank advises details of disbursement to overseas buyer.

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