Post Box No 3233

Manama - Kingdom of Bahrain

Phone : +973 17295154

Fax : +973 17295156

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Applications and Tenors


What is Discountable


Export credit agencies and forfaiting







Frequently Asked Questions



Forfaiting is the form of export trade finance involving the discount of trade –related debt obligations due to mature at a future date without recourse to the exporter/ endorser.

Generally exporter’s receivables are guaranteed by the importers credit instruments such as Letter of Credit, Bills of Exchange, Promissory Note etc.

These instruments which are on non-recourse basis and avalised/ guaranteed by the bank, can be discounted before tenor period, for the improvement of the financial ratios of the organization.

Forfaiters will then quote a price being a discounted rate to be applied to the credit instrument, calculated on the basis of the underlying cost of funds (LIBOR) plus margin, conditions of the instrument and the agreement between client and the forfeiter.
In return the forfeiter bears the whole responsibility for claiming the debt from the importer.

Forfaiting is useful in offloading burden on the balance sheet where tenor period is more than two years. Availability of funds could be varied from US$ 1,000,000 till US$ 45-50,000,000.


Major Advantages of Forfaiting

Volume: Can work on a one-shot deal, without requiring an ongoing volume of business.

Speed: Commitments can be issued within hours/days depending on details and country.

Simplicity: Documentation is usually simple, concise, and straightforward.


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