c) Preshipment finance is same as post shipment finance

Preshipment finance and post shipment finance are two critical aspects that facilitate smooth transactions between exporters and importers. While both types of financing serve the purpose of providing liquidity to businesses involved in trade, they differ significantly in terms of timing, purpose, and the underlying risks they address. Let's delve deeper into these concepts to understand their nuances.

Preshipment Finance:

Preshipment finance, also known as pre-export finance or packing credit, refers to the financial assistance extended to exporters to fulfill their various pre-export obligations. These obligations include procuring raw materials, processing, manufacturing, packaging, and transporting goods to the port of shipment. Preshipment finance is crucial for exporters as it enables them to meet these expenses and complete orders without facing cash flow constraints.

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