A credit facility enabling a foreign buyer to obtain credit for a purchase when the exporter does not wish to provide it. The buyer opens a credit at a branch or agent of his or her bank in the exporting country, the exporter being paid by sight draft on the buyer's credit. The bank in the exporting country accepts a bill of exchange drawn on the buyer, which is discounted and the proceeds sent to the bank issuing the credit. The buyer only has to pay when the bill on the bank in the exporting country matures.
Subjects: Financial Institutions and Services.