Export Credit Refinancing (ECR) in Malaysia is a scheme under which Exim Bank provides short-term financing to direct or indirect exporters through the commercial banks. The facility is offered by commercial banks which are then refinanced by Exim Bank.A direct or indirect exporter who wishes to use the ECR facility should arrange for an ECR credit line with the commercial banks and then obtain access approval to the ECR facilities from EXIM Bank.
The ECR facility is available to direct exporters and indirect exporters who are involved directly or indirectly in export activities and have obtained ECR credit line from the commercial banks.
Type of Facilities
- The pre-shipment ECR facility is a loan available to direct or indirect exporters to finance their purchases from domestic and/or foreign suppliers prior to shipment of goods to overseas buyers.
- The post-shipment ECR facility is an advance or financing to direct exporter after shipment of goods to overseas buyers.
Method of Financing
Two Methods of Financing are available for exporters under the pre-shipment ECR i.e. the Order-Based Method and Certificate of Performance Method (CP).
Under the Order-Based Method, the pre-shipment ECR financing is against the export or purchase orders whilst under CP method, the pre-shipment financing is against the CP issued by Exim Bank.
The Method of Financing under post-shipment ECR facility is bills discounting and the financing is against a set of export documents presented to the commercial banks.
Period and Amount of Financing
The maximum period of financing under the Pre-shipment ECR and Post-Shipment ECR is four (4) months and six (6) months respectively.
Under the Order-Based Method, exporters can obtain financing up to 95% of the value of their export order, while under the CP method, the amount of financing is subject to the CP limit granted by Exim Bank.
The minimum and maximum amount of financing per facility under the ECR facility is Ringgit Malaysia (RM) 10, 000 and RM50 million respectively.
Last Updated on: 18-11-2009