Askari Cotton Ginning Finance

Overview

Fueling Cotton Growth, Enabling Success!

Askari Cotton Ginning Finance is designed to support the seasonal working capital requirements of cotton ginning factories, enabling them to efficiently procure phutti in line with their milling capacity. By providing timely financial assistance, the product helps ginners manage procurement cycles, optimise cash flows, and maintain uninterrupted operations during the cotton season. With this tailored facility, Askari Bank strengthens the backbone of Pakistan’s cotton value chain, empowering ginners to focus on productivity and growth while we take care of their financing needs.

Secure your cotton season with Askari Ginning Finance today.

Key Features

Financing Purpose

Facility Details

Purpose

Cash Finance (CF)

Running Finance (RF)

To meet the working capital requirements of Cotton Ginning Factories for the procurement of phutti, as per milling capacity.

Cash Finance Trading

To meet working capital requirements for off-season. Cotton Ginning Factories are allowed for procurement of other commodities (except wheat) for trading purpose.

To meet the working capital requirements of cotton ginning factories, i.e. transportation, salary & wages, utility and other administrative expenses, Packaging Material, to finance advance payments for crop purchase, etc.

Running Finance Trading

To meet working capital requirement for trading purpose

Max Financing Amount

Maximum Rs. 300M for ME and Rs. 100M for SE
RF Limit to be capped at 25% of CF Limit

Markup Rate

Cash Finance	Running Finance
03 months KIBOR + Minimum 4.00% p.a.	03 months KIBOR + Minimum 4.50% p.a.

Tenure

1 year as per the cleanup corridors for CF and the cleanup requirements for RF
CF trading Max 120 days RF trading One Year

Security

Cash Finance (CF)

Running Finance (RF)

CF limit fully secured against pledge of other commodities (except wheat) with margin as per AKBL Credit Procedures Manual or as per SBP requirement (whichever is higher).

Additional Security:

In a case where finance is secured primarily against the pledge of stocks, and units, to obtain additional collateral, which should be 25% of the limit/finance amount.
25% of the limit is to be secured through the Market Value (MV) of the mortgaged Residential / Industrial / Commercial Property (Land & Building only).
In case of cash collateral (AKBL Certificates/ lien over account, excluding ASDA), 25% of the limit amount can also be accepted independently (DSCs/other bank TDR not allowed). Third party allowed (only for their dependent family members, which include spouse(s), lineal ascendants & descendants, brothers and sisters.
Financing against agricultural property may be accepted with 50% on FSV, in exceptional cases, provided it is demarcated, with the approval as defined in the CAA framework. This exception will be reported to the CRMC.
A combination of both property & cash collateral can also be accepted (25% of the loan limit to be covered in both collateral)
Personal Guarantees of Borrower/ Partners/Directors of the Company.
In addition to the above collateral, any other security deemed necessary, as per the AKBL Credit Procedures Manual.

RF trading Collateral

Hypothecation of company / mill’s receivable/stocks as per AKBL Credit Procedures Manual
Preferably Effective Mortgage of Residential / Industrial / Commercial property (Land & Building only) with 25% margin on FSV and third-Party property 30% margin over FSV as per AKBL Credit Procedures Manual OR
Cash collateral in shape of AKBL Certificates / lien over Account (excluding ASDA) with 10% margin, (other bank TDR /DSCs not allowed). Third party allowed (only for their dependent family members which include spouse(s) lineal ascendants & descendants, brothers and sisters and can accept independently OR
Combination of both property & cash collateral with margins as described above.
Personal Guarantees of Borrower/Partners/Directors of the Company OR
In addition to above collateral, any other security deemed necessary, as per AKBL Credit Procedures Manual.

Eligibility

The age of the borrower (in case of sole-proprietorship) must be a minimum 20 years; however, the age is not to exceed 65 years at the time of application. This age can be relaxed in the case of effective succession planning for business operations. (Succession planning criteria to be followed as defined under the prevailing bank's credit policy). This criteria is not applicable if the business concern is a partnership or a limited company. In partnership/limited company cases, one of the partners or directors should qualify mentioned criteria.
Minimum 3-year operating history of business; however, new ventures of established business groups or other exceptions will be looked at on a case-by-case basis.
Minimum 50% of the applicant's sales to be documented through account turnover with bank(s). The criteria for turnover may be relaxed to 35% on an exceptional basis with strong justifications for NTBs.
For customers where there are multiple banking and lending relationships, renewal on limit decisions will be in proportion to the total sales, routed with all bank accounts.
Market check to be obtained from at least two different sources for the Borrower and Primary Sponsor.
Electricity Bill Payment history should be regular, as a minimum, all electricity bills for the last six (06) months must have been paid.
All other parameters are to be evaluated as per AKBL credit policy and SBP directives issued from time to time.
In case of PEP, approval from the relevant committee should be obtained.
Renewal of existing limits subject to complete adjustment of CF and payment of up-to-date markup/instalments/other dues.
Any other exception not mentioned in the program is to be approved as per the CAA Framework.

Required Documents

Documents required at the time of processing:

Application Form for SE/ME
Copy of CNIC
Copies of company registration documents
Annual / Semi-annual Financials (Audited in-house as per SBP Requirement)
The electricity bill as evidence of the Cotton Factory being functional. '
Copy of security documents for legal opinion, etc.
Legal opinion and evaluation report by the bank’s approved lawyer/evaluators, respectively.
Bank Statement.
An undertaking to be obtained from the Borrower that the Mill Operations were not run on a Commissioning basis (fully or partially) during the last six months and in future till the adjustment of the loan
An undertaking to be obtained from the borrower that the subject financing will be used only for the intended purpose.
Any other document required by RM/TL for credit proposal assessment / as per AKBL’s credit procedure manual.

How to Apply

To view the flyer of Askari Cotton Ginning Finance, please click here
To view the instruction guide for Applying SME Financing, please click here
To view Frequently Asked Questions related to Askari Cotton Ginning Finance, please click here

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