Import Credit is a financing facility that allows importers to purchase goods from overseas suppliers with deferred payment terms.
How It Works:
- The importer places an order with a foreign supplier.
- A financial institution provides credit support.
- The supplier receives payment or assurance.
- The importer repays the lender after a specified period.
Benefits:
- Improves cash flow
- Enables bulk purchasing
- Supports business expansion
- Reduces immediate financial burden
Example:
An importer buys goods from a foreign supplier and repays the amount after 90 days using import credit.