• The Bank wishes to maintain a strong position in the field of foreign trade financing and continue provide its customers with a broad scale of products under the unique mechanism of buyer's credits.

      Buyer's Credit


      Buyer's Credit
      Export Financing under Buyer's Credit Scheme:


      The Bank wishes to maintain a strong position in the field of foreign trade financing and continue provide its customers with a broad scale of products under the unique mechanism of buyer's credits.
      In this mechanism, the Iranian exporters export Iranian goods and services and the foreign buyers request the Bank to grant the financing facilities.
      As an extra commercial advantage, Iranian exporters want to offer foreign buyers a payment deferral on favorable terms as regards the interest rate and terms. In the meantime, Iranian exporters would like to be paid immediately and definitively.
      The Bank offers buyer's credit to Iranian exporters and their foreign buyers. The characteristics of this scheme are as follows:
      A credit facility granted by the Bank directly to foreign buyers (there is a financial contract separate from the commercial contract);
      At an competitive interest rate with repayment period of 2 - 7 years;
      With credit insurance against the risk of termination and non-payment (political and commercial risks) offered by the related Export Credit Agency (ECA);
      With the possibility of a fixed interest rate for the entire duration of the credit facility (drawdown and repayment period).

      Buyer's Credit extends in two frameworks as follows:
      Credit Lines:
      For the purpose of promotion of its banking relations with foreign banks in tandem with its significant role in expansion of trade relations between I. R. Iran and other countries, Export Development Bank of Iran extends lines of credit to foreign banks to be utilized for financing purchase of Iranian goods and services.
      Buyers' Credit:
      As the leading Iranian bank in providing foreign buyers of Iranian goods and services with financing facilities, EDBI extends buyers' credit as a post-shipment financing instrument. Buyers' credit increases purchasing power of the foreign buyer to buy Iranian goods and services on a deferred-payment basis.
      In order to determine the mechanism of disbursement of financing facility by EDBI and repayment by the buyer, a financing agreement shall be concluded between EDBI and the buyer.
      Upon presentation of the respective documents (shipping documents, statements, etc) to EDBI by the exporter, EDBI will pay to the exporter on behalf of the buyer and the buyer (in accordance with the terms and conditions of the financing agreement) will undertake to repay the financing facility and accrued facility charges on due dates.

      General terms and conditions:
      Short-term*:
      Short-term financing facility is extended with a maximum financing period (the total duration of utilization and repayment) of two years with the following terms and conditions:
      Maximum Percentage of Financing:
      90% of the value of the goods and services as determined in the contract concluded between the foreign buyer and Iranian exporter; Contract should be concluded in EUR or any other freely convertible currency (except USD) and Financing Facility shall be paid in the respective currency as well.
      Advance payment:
      At least 10% of the Contract value should be paid by the buyer to the Iranian exporter through EDBI as advance payment.
      Repayment Period:
      the buyer should repay the principal amount of EDBI's financing facility in not more than 4 equal, consecutive, semi-annual instalments: the first instalment falling due 6 months after each disbursement by EDBI; the buyer may also repay the whole financing facility to EDBI not later than 720 days after the disbursement.
      Facility Charges:
      In addition to the principal amount of financing facility, the buyer should also pay facility charges to EDBI; the facility charges rate for each financing facility shall be determined by EDBI's credit committee on a case-by-case basis (e.g. the situation and risk ranking of the buyer’s country). However, the usual rate of facility charges is CIRR/LIBOR plus a margin will be determined case by case.
      Delayed payment charges:
      If any amount is not paid by the buyer to EDBI on its due date, then the facility charges for the period of the delay shall be calculated at the minimum rate of 2% more than the above-mentioned, facility charges rate.
      *For financing applications with repayment periods of not more than one year, EDBI provides financing facilities within the framework of discounting deferred payment letters of credit to be issued by the banks acceptable to EDBI.
      Medium-term:
      Medium-term financing facility (suitable for exportation of some capital goods and implementation of projects) is extended with a maximum repayment period of 7 years with the following terms and conditions:
      Maximum percentage of financing:
      80% of the value of the goods and services as determined in the contract concluded between the foreign buyer and Iranian exporter; Contract should be concluded in EUR or any other freely convertible currency (except USD) and Financing Facility shall be paid in the respective currency as well
      Advance payment:
      At least 20% of the Contract value should be paid by the buyer to the Iranian exporter through EDBI as advance payment
      Utilization period:
      The implementation period of the projects to be financed (during which EDBI's financing facility is disbursed) should not be more than 3 years
      Repayment period:
      For exportation of capital goods:
      the buyer should repay the principal amount of EDBI's financing facility in not more than 6 equal, consecutive, semi-annual instalments: the first instalment falling due 6 months after Each disbursement by EDBI
      For implementation of projects:
      the buyer should repay the principal amount of EDBI's financing facility in equal, consecutive, semi-annual instalments; the first instalment falling due 6 months after starting point of the project or the end of the utilization period (whichever occurs earlier)
      Facility charges:
      In addition to the principal amount of financing facility, the buyer should also pay facility charges to EDBI; the facility charges rate for each financing facility shall be determined by EDBI's credit committee on a case-by-case basis. However, the usual rate of facility charges is CIRR/LIBOR plus a margin will be determined case by case.
      Delayed payment charges:
      If any amount is not paid by the buyer to EDBI on its due date, then the facility charges for the period of the delay shall be calculated at the minimum rate of 2% more than the above-mentioned facility charges rate
      Management fee:
      The buyer shall pay a management fee to EDBI at the beginning of the financing period (i.e. after conclusion of the financing agreement between EDBI and the buyer); the management fee is calculated at the maximum rate of 0.25% of EDBI's financing facility.
      Commitment fee:
      For exportation of capital goods:
      The buyer shall pay commitment fee to EDBI at the maximum rate of 0.25% (per annum) for the unutilised portion of the financing facility; the commitment fee shall be paid on the 1st due date of each EDBI's disbursement.
      For implementation of projects:
      The buyer shall pay commitment fee to EDBI at the rate of 0.25% (per annum) for the unutilised portion of the financing facility; the commitment fee shall be paid on 15th March and 15th September during the utilization period.

      Download and Complete Form:
      Please download and complete attached application form, EDBI head of int'l finance and investment department is looking forward to provide more information.
      BUYER’S CREDIT APPLICATION TO EDBI

      For more information connect to:
      Finance and Investment Department
      Tel: +9821 88 700 925
      Fax: +9821 88 700 925, 88 700 755
      Asia & Oceania section:
      Tel: +9821 81922502 & 81922494
      America and Europe:
      Tel: +9821 81922503 & 04
      Africa section:
      Tel: +9821 81922505 & & 81922498

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