EDBI At a Glance

Introduction

Export Development Bank of Iran (EDBI) was established on July 10th 1991, and subsequently initiated its activities in September 1992. EDBI acts as Iran's Ex-Im bank and plays a pivotal role in providing financing facilities and banking services to Iranian exporters and the buyers of the goods and services of Iranian origin.

Mission

EDBI endeavors to help fostering diversification and development of the national economy, to enhance economic co-operation with foreign countries and to provide financing facilities as well as other banking and advisory services to Iranian exporters of non-oil products.

Assets and Shareholders' Equity

Total assets and shareholders’ equity of EDBI recorded at FYE 20.03.2009 amounting to USD 3.92 billion and USD 2.04 billion respectively.

Bank Network

The Bank network is comprised of 34 local branches (5 branches in Tehran and 29 branches in main provinces) and one Representative Office in Kazakhstan along with a wholly owned bank in Caracas, Venezuela and a subsidiary partially owned bank in Minsk, Belarus. In the meantime, in line with its local strategy the Bank has so far highly considered developing into new markets and drawing up plans for establishment of other foreign branches and subsidiaries in other countries.

Services

The Bank's service offer strategy is aimed at providing valued-added services to its clients and is comprised of the followings:

1. Trade Finance:
   
   • EDBI facilitates trade between Iranian entrepreneurs and foreign clients by handling export/import letters of credit, letters of guarantee (tender, performance and advance-payment guarantees) and documentary collection under trade finance means.
2. Account services:
   
   • Operating current and deposit accounts in local and foreign currency;
   • Opening Gharz-al-hasaneh (non-interest bearing) current and deposit accounts;
   • Commercial payment, money transfer in shortest time for abroad and in the same day inside the country;
   • Issuance and collection of cheques.
3. Issuance of debit cards (in Rial) and internationally acquired credit cards (in foreign currency):
   
   • To facilitate payments of purchasing goods and services through POS¬s and making cash withdrawals from ATMs. These cards are being accepted by all banks having access to the E-payment mechanism (known as SHETAB).
   • EDBI also renders international credit cards services to its clients enabling them to make their payments globally via these cards and also receive cash from ATMs in all existing currencies throughout the world.

Modes of Financing

1. Buyer’s Credit
   In order to assist Iranian exporters to have competitive edge, EDBI provides facilities under Buyers' Credit to foreign buyers of Iranian goods and services.
   Buyers' Credit will increase the purchasing power of foreign importers of Iranian goods and services on deferred payment terms. EDBI upon advice of the importer’s bank due date undertaking will disburse the invoice value to the exporter in cash and the importer will repay the principal and accrued interest at maturity dates. This mechanism can be used for exporting of consumer, intermediary and capital goods and implementation of the projects abroad.
   Buyers’ Credit requirements
   
   • Instrument of Payment: Letter of Credit to be issued by a bank acceptable to EDBI.
   • Percentage of Financing: up to 80 percent of the invoice (goods/services) value for medium-term financing and up to 90 percent for short-term financing.
   • Eligible Exports: Goods and services with at least 60 percent of Iranian origin.
   • Repayment Period: to be determined on case-by-case basis by EDBI.
   • For goods and projects the first installment would be paid 6 months after the negotiation of the shipping documents and six months after starting point according to the OECD Arrangements for Officially Supported Export Credits.
   • Facility Charges: The facility charge will be computed on the basis of floating rates (LIBOR/EURIBOR) or the fixed rate (CIRR) plus a competitive margin.
2. Credit Line:
   To promote banking relations with foreign banks, EDBI extends lines of credit to foreign banks to be utilized for financing purchase of Iranian goods and services. These lines play significant role in expansion of trade relations between Iran and other countries.
3. Supplier's Credit:
   It is a financing arrangement under which exporters extend credit to a foreign buyer to enable them to purchase the goods and services of Iranian local content. Usually the buyer pays portion of the contract value in cash (as advance payment) and issues promissory note or accepts draft as evidence of its obligation to pay the balance over a period of time. Thus the exporters accept a deferred payment from the buyer, and may be able to obtain cash payment by discounting or selling the draft or promissory notes issued at the counters of EDBI.
4. Financing Investment Schemes
   EDBI helps Iranian Investor who desires to invest in foreign countries through financing investment schemes. The criteria for financing a project outside Iran are as follows:
   
   • Competency of the Iranian investor to carry on with the investment;
   • Feasibility of projects from economic, financial and technical points of view;
   • Existing of acceptable law of promotion and protection of foreign investment in the host country;
   • Having 60 percent of Iranian origin.
5. Working Capital scheme
   Under pre-shipment export financing scheme, working capitals have been made available to Iranian exporters to purchase machineries, equipments, raw material and to carry on with production, packaging, transportation and re-export inasmuch as covering manufacturing costs. Normally the maximum credit extended amounts to 90 percent of shipment value against letters of credit.
6. Import Financing Scheme under Resources Granted by Foreign Banks:
   EDBI has concluded financing and refinancing arrangements with foreign banks for import of raw materials, intermediary and capital goods by the Iranian buyers. This facility will be handled in framework of the Buyer’s Credit mechanism.
   The terms of captioned facility are present as follows:
   Repayment period: Up to 12 months
   Charges: 2 % + payable interest to Foreign Bank
   Payment instrument: Letters of credit
7. Cooperation with Islamic Development Bank
   EDBI maintained robust relations with Islamic Development Bank (IDB) and its affiliated institutions. Also the Bank has close relations with ITFC (International Islamic Trade Finance Corporation) in supporting Iranian importers and exporters whose applications to obtain finance have been approved by Islamic Development Bank through issuance of letters of credit and guarantees from sources provided by IDB. Besides, several credit lines have been received from ITFC and mutual relations in this field are going to be expanded.
   Moreover, ICIEC (The Islamic Corporation for the Insurance of Investment & Export Credit) has provided the requisite insurance coverage for financing operations as well as confirmation for import letters of credit.