Forfeiting
is the Discounting of International export trade receivable on without recourse
basis.
CHARACTERISTICS OF FORFEITING
-
Medium
term credit from 180 days to 7 years available
-
Minimum
size of transaction in USD 1, 00,000.
-
Avail
or guarantee of importer’s bank required.
-
Bill
of Exchange or Promissory Note is required
-
Commitment
period and option
-
Cost
of forfaiting – option fee, discount rate and handling charges
-
100%
financing without recourse to exporter
MECHANISM OF FORFEITING
Provide following
information to forfeiter:
-
Country
of destination
-
Name
of Buyer
-
Name
of guarantor bank
-
Amount
and currency of transaction
-
Term
of Payment
-
Nature
of goods
-
Shipment
date
EXIM Bank arranges forfeiter
for Indian exporters.
BENEFITS OF FORFEITING
-
Eliminate
exchange, interest, commercial and political risks
-
To
conduct business with risk foreign markets
-
Cash
flow improvement
-
Balance
sheet free transaction
-
Simple
transaction
-
No
debt collection problems
Posted by: Export Genius
No comments:
Post a Comment