Line of Credit means under Import and Export


Line of Credit

Line of Credit means under Import and ExportWhen a number of buyers are located in the same country, instead of extending credit to different buyers, line of credit is extended to a financial institution located in the buyer's country by the financial institution from seller's country. The advantage is that the responsibility in judging the creditworthiness of different buyers and recovery from them is shifted to that financial institution located in buyer's country. In this process, the financial institution extending line of credit, in the exporter's country, becomes totally free from the worries connected with identifying the buyers, in importer's country, and recovering from them.


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