________ is a specialized technique to eliminate the risk of nonpayment by importers in instances where the importing firm and/or its government is perceived by the exporter to be too risky for open account credit.

Question

Quizplus · Accepted Answer

Forfaiting is a technique used to mitigate the risk of nonpayment by importers in situations where the importer or its government is considered too risky for open account credit. The process involves the exporter selling its unpaid receivables to a forfaiter at a discount, thereby receiving payment immediately and transferring the risk to the forfaiter. This technique allows the exporter to avoid the credit risk associated with cross-border transactions.

________ Is a Specialized Technique to Eliminate the Risk of Nonpayment