________ 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 specialized technique used to eliminate the risk of nonpayment by importers. It is used in situations where the importing company or its government is perceived as too risky for open account credit. Under the forfaiting arrangement, the exporter sells the right to receive payment from the importer to a forfaiter at a discount. The forfaiter assumes the risk of nonpayment and collects payment from the importer when due.

________ Is a Specialized Technique to Eliminate the Risk of Nonpayment