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    Question

    A loan facility extended for import of goods or

    services, is called as-  
    A Import finance Correct Answer Incorrect Answer
    B Export credit Correct Answer Incorrect Answer
    C Trade Credit Correct Answer Incorrect Answer
    D Buyer's credit Correct Answer Incorrect Answer
    E All are correct Correct Answer Incorrect Answer

    Solution

    A buyer's credit is a loan facility extended to an importer by a bank or financial institution to finance the purchase of capital goods or services and other big-ticket items. Buyer’s credit is a very useful mode of financing in international trade, since foreign buyers seldom pay cash for large purchases, while few exporters have the capacity to extend substantial amounts of long-term credit to their buyers. A buyer’s credit facility involves a bank that can extend credit to the importer, as well as an export finance agency based in the exporter's country that guarantees the loan. 

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