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Trade finance

 BSTDB Trade Finance Program use a number of instruments designed to address funding needs of suppliers/exporters and /or buyers/importers of Member Countries. Trade Finance business is conducted through selected financial intermediaries (such as commercial banks, leasing companies, ECAs and development banks) within the framework of a credit facility agreement signed between BSTDB and financial intermediary.

Most Trade Finance operations will normally require a financial intermediary to perform due diligence on the beneficiary (local supplier/exporter or buyer/importer) and assume that beneficiary risk -- the BSTDB has limited resources to reach beneficiaries in Member Countries, perform due diligence on them and assume the related risks.The BSTDB intention is to work with local financial institutions and support their development and capabilities to provide better service and a broader range of financial products.

BSTDB will typically consider Trade Finance operations through financial intermediaries of a minimum amount set at EUR 4 million.

BSTDB will also consider direct applications to finance exports or imports of interested beneficiaries of a minimum amount set at EUR 4 million.

Trade Finance facilities can be either short -term with a tenor of up to 360 days or medium/long-term with a tenor of up to 5 years. In exceptional circumstances long- term tenors may be extended for up to 10 years.

BSTDB can offer fixed or floating interest rates for trade finance facilities, consisting of a base rate and a margin charged on the outstanding amount of the loan. In addition to above, fees and commissions that will vary depending on the products, will be charged. Guarantee fees will be charged as a percentage of the guarantee amount per annum and will vary depending on the risk involved.

  • Export Finance Facilities

    The purpose of the export finance facilities is to provide financial support to suppliers/exporters in the Member Countries to enable them to perform export transactions. Under this category, BSTDB offers Pre-export Finance, Single/Multiple Supplier Refinancing Facilities and also Export Finance Facility Guarantees.

    Typically, suppliers/exporters loans will be short-term.  Longer tenors may apply to cases where traded goods have long manufacturing periods (e.g. capital goods) and /or trade contracts terms provide deferred payment options.

    • Pre-export Finance Facility

      Pre-export Finance Facility is designed to provide financing to suppliers/exporters in advance necessary to produce manufactured goods, commodities and agricultural products for export and also extend deferred payment terms to their buyers, if needed.

      Pre-export Finance Facility is typically available through selected financial intermediaries, normally banks and export credit agencies (ECAs), located in the Member Countries, to which the BSTDB has extended a Pre-export facility. BSTDB Pre-export Facility will be committed and could be extended on revolving basis. The Bank will accept all methods of payment under the Pre-export Finance Facility transactions financed through Financial Intermediaries. The Bank reserves the right to monitor transactions and may require information from the intermediary in this regard. The BSTDB Pre-export Finance Facility provides financing to transactions when the goods being exported are produced in the Member Countries and comply with the minimum local content provisions set above.

    • Single-Multiple Supplier Refinancing Facility

      The purpose of this Facility is to help suppliers/exporters in the Member Countries sell capital goods in large amounts to markets in other Member Countries and elsewhere with medium and possibly long-term credits. These transactions can include goods such as heavy equipment, machinery, vehicles, and other capital goods.

      The BSTDB’s Single/Multiple Supplier Refinance Facility is a mechanism for export promotion. The supplier/exporter is provided financing by BSTDB against deferred payment receivables, either directly from BSTDB (Single Supplier Refinancing Facility) or via a qualified financial intermediary (the Multiple Supplier Refinancing Facility). The Facility enables companies in the Member Countries to enter markets with medium and long-term supplier credits that would otherwise be closed without such financing.

    • Export Finance Facility Guarantee

      BSTDB will accept requests for providing Guarantees with the aim to guarantee the payment obligation of a selected financial intermediary in a Member Country for export finance loans extended by international banks,  – typically an IFI or national financial institution/agency.

      Such guarantees will be issued to cover the country risk and commercial risk of a financial intermediary to enable them to obtain external financing in competitive terms, which otherwise would not be available without BSTDB’s guarantee.

  • Import Financing

    BSTDB provides import financing typically through financial intermediaries to buyers/importers in a Member Country to finance multiple contracts for imports of commodities, capital goods and manufactured products.

    These Loans are provided to increase competitiveness of goods produced in Member Countries and may improve the competitive position of manufacturing exporters in the region. To compete effectively, Member Country exporters are quite often called to offer buyers financing at par with the financing offered by competitors outside the BSTDB region.

    • Multiple Buyer Credit Facility

      The facility provides financial support to buyers/importers in a Member Country to enable them to import goods.

      The Multiple Buyer Credit Facility (MBCF) will be offered through loans extended to financial intermediaries (commercial banks, leasing companies or export credit agencies) for the purposes of providing buyer credits to numerous importers in a given Member Country. BSTDB will assume risk of the financial intermediary technically accepting the country risk and commercial risk related to the respective intermediary while the beneficiary (importer) risk will be taken by the financial intermediary. Both pre-shipment and post-shipment periods are covered under this facility for short and medium term transactions.

    • Single Buyer Credit Facility

      To provide medium and (in exceptional cases) long-term financial support to Member Country beneficiaries (buyers/importers) requiring large-value supply contracts and purchases of industrial machinery and other capital goods.

      BSTDB provides a Single Buyer Credit Facility to a financial intermediary, through which a sub-loan would be provided to the buyer – in this case the financial intermediary would assume the buyer risk and the BSTDB would assume the country risk and the commercial risk of the financial intermediary.

      The minimum amount required for a Single Buyer Credit Facility is SDR 3.5 million. In the event a buyer wishes BSTDB Buyer Credit support for an amount of less than SDR 3.5 million, an application should be submitted under the Multiple Buyer Credit Facility.

    • Import Finance Guarantee

      Import Finance Guarantees are substitute for provision of credit intended to help increase trade volumes among Member Countries by providing country risk and commercial risk cover on acceptable short-term trade finance instruments of issuing banks in Member Countries.

      BSTDB assumes payment risk (country risk and/ or commercial risk) of the bank issuing the trade finance instrument, either in full or up to an agreed percentage. BSTDB will normally encourage risk-sharing with confirming banks and trim its pricing according to the amount of risk being assumed by the confirming bank.

  • Combined Trade Finance Facility

    BSTDB offers to eligible financial intermediaries the possibility to apply and obtain Combined Trade Finance Facilities (CTFF) enabling them to provide credits to both suppliers/exporters and buyers/importers under a single loan agreement.

    In the TFF structure, BSTDB will combine the Pre-export Facility and Multiple Buyer Credit Facility under a single limit extended to the selected financial intermediary and the relevant CTFF agreement will establish all terms and conditions of the facility. Terms and conditions and use of funds under TFF will replicate Pre-export Facility and Multiple Buyer Credit Facility characteristics.