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Under the Export Credit Refinancing (ECR)
Scheme which is currently administered by the Export-Import
Bank of Malaysia Berhad (EXIM) Bank) effective from 1
January 1998 (previously the Scheme of Malaysia), direct and
indirect exporters of eligible manufactured goods,
agricultural product and select primary commodities can
obtain short-term financing for purposes of exports under
the pre-shipment and post-shipment ECR from the commercial
banks (ECR banks) at competitive rates of interest
(i) Post-shipment Facility
Exporters of eligible products, who
export on usance or credit terms of a minimum of 30 days,
may obtain post-shipment ECR upon shipment of their goods.
The period of financing is by the period of credit extended
by the exporter to the foreign buyer, but subject to a
minimum of seven days and a maximum of six months. The
maximum amount of refinancing is 100% of the value of the
export, subject to a maximum limit of RM50 million loans
outstanding at any one time, while the minimum amount
eligible for refinancing is RM10,000. The post-shipment ECR
loans must be liquidated on or before their maturity date or
upon receipt of the export proceeds, whichever is earlier.
(ii) Pre-shipment Facility
Exporters of eligible products and
their domestic suppliers of input materials can obtain
pre-shipment ECR to finance their working capital for
production of goods for export. For trading companies, they
can obtain pre-shipment ECR to finance their purchase of
domestic intermediate/final products local suppliers for
export. The period of financing is between the receipt of an
export order and the time of export, subject to a maximum
period of four months. The maximum amount of refinancing
under this facility is 80% of the export order value,
subject to a maximum limit of RM50 million loans outstanding
at any one time. direct exporters possessing the following
characteristics are eligible to utlise the order-based
method:
(a) new exporters, whose tenor of their
export business is less than 12 months; or
(b) exporters whose maximum exports of eligible goods for
the last financial year and the proceeding 12 months is less
than Rm1 million; or
(c) seasonal exporters.
Domestic input suppliers may have
access to the pre-shipment ECR facility through the issuance
of an ECR Domestic Letter of Credit (DLC) or the ECR
Domestic Order (DPO) issued by the exporters in their favor.
The maximum amount of refinancing for the domestic input
suppliers subject to a maximum limit of RM50 million loans
outstanding at any one time.
As an alternative, direct exporters may
have access to the pre-shipment ECR facility through the
Certificate of Performance (CP) method. To utilise the
CP-based method of RM1 million of eligible products during
the last financial year and the preceding 12 months.
Application for a CP shall be made to EXIM Bank, through an
ECR bank. The
validity period of a CP is 12 months, while
the maximum eligible amount is 70% of the export value during the
preceding 12 months. The eligible amount is segregated into three
periods of four months each, subject to a maximum refinancing
amount of RM50 million per period.
The pre-shipment ECR loans must be liquidated,
on or before their maturity date or upon receipt of the export
proceeds and post-shipment proceeds, whichever is earlier. For
loans extended to the domestic suppliers on the ECR DLC/DPO basis,
the loans are to liquidated upon receipt of payment from the
buyer's bank or upon maturity of the loan, whichever is earlier.
Goods not specified in the Negative List of
the ECR Scheme would be eligible for financing, subject to
fulfilling the criteria of having a minimum local content of 30%
and a minimum value added to 20%. Exporters, whose products do not
meet these criteria, may apply to EXIM Bank for special
consideration on a case-by-case basis. Exemption from the local
content and value added criteria are, however, extended to
agricultural products, selected primary commodities, wood articles,
base metals and textiles.
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General Section
