Murabahah Post Shipment (Revolving Export) Facility

Murabahah Post Shipment (Revolving Export Facility) is an advance extended to exporters upon presentation of acceptable export documents, except a bill of lading. The facility should be advanced against valid export documents. In case of post-shipment, Murabahah cannot be executed for goods already exported. However, Murabahah can be executed for fresh purchase required for the next shipment against the assignment of proceeds that are not yet collected from the earlier shipments.

The exporter/customer appoints the bank as his/her/its agent to collect the proceeds on his/her/its behalf. This financing requires bank and exporter to sign at least two agreements separately. One the applicant will authorize the bank to collect the proceeds on his/her/its behalf as an agent. The second agreement will provide Murabahah financing to the exporter, and authorize the bank for keeping proceeds for the payment of Murabahah financing.

Unique Features

Eligibility	Most banks in Ethiopia consider exporters with clean track of record as eligibility criteria for the advancement of the Murabaha post shipment /revolving export facility
Facility Amount	The Murabaha post shipment amount (cost plus profit) to be advanced to the customer is up to a maximum of 90% depending upon the financial strength and truck record of the customer.
Double Financing	The customer (exporter) shall not be provided with a Pre-Shipment Export Financing Facility on the same sales contracts to avoid double financing.
Facility Period	The facility shall be availed for one year and shall be reviewed every year unless the Bank demands it to be reviewed in less than this period by the Financing Approval Team for any remedial action when the performance of the account is deteriorating.

Murabahah Post Shipment Facility Process

Interest Free/Islamic Banking - Ethiopia

Tuesday, April 23, 2019