This type of finance is offered to the importer to finance their needs for meeting the cost including freight, insurance, and customs and excise duty payable on the imported merchandise. The bank mostly pledges the imported goods. The merchandise is released for the use of the importer upon repayment of the bank’s finance and charges either fully or partially, on production of the Delivery Order issued in favor of the borrower. LIM may be created in two ways:
i) LIM on importer's request
ii) Forced LIM. LIM
is post shipment import finance.