DHAKA: Bangladesh introduced International factoring mechanism that will help country to increase efficiency in its foreign trade, export volume and lowering cost of import.
The traditionally used as a system for payment in international trade, is gradually losing its acceptability.
Non-LC mechanism, particularly open account trade payment and documentary collection, also have many barriers including time consuming process of payment.
The seminar styled as “International Factoring for Foreign Trade” was jointly organized by International Chamber of Commerce (ICC), Factor Chain International (FCI), Asian Development Bank (ADB) and Bangladesh Institute of Bank Management (BIBM) at a city hotel.
Commerce Minister Tofail Ahmed was present as chief guest, welcoming the international factoring mechanism as a “great initiative” for the country’s foreign trade payment.
“But as a number of issues are related with this, we will have to discuss further about the mechanism to bring a fruitful outcome in the country’s export-import trade payment,” he, however, said.
ICC, Bangladesh president Mahbubur Rahman presided over the seminar.
“International factoring provides a simple solution to problems in case of such non-L/C trade payment,” he said.
Mahbubur Rahman said under the system the export factors/banks collect money from abroad by approaching importers through importers’ banks/factors in their own country, in their own language and in the locally accepted manner.
“An import factor/bank provides exporters with 100% protection against the importer’s inability to pay. Exporter’s bank also finances 80% of the invoice value to the exporter immediately after shipment.” ICC,B president added.
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