Buyer’s (Buyer) Credit is a short-term credit available to an importer (buyer) from exporter’s lender such as banks and other financial institutions for goods. The Buyer’s Credit is given to an importer’s account by the recipient of a letter of credit in exchange for on-time payment. The originator of the letter of credit (the importer’s own bank) may negotiate with the recipient for buyer credits. (Refer to the Supplier Credit; Export Credit)
Reference Definition by OECD: Buyer Credit is a financial arrangement in which a bank or financial institution, or an export credit agency in the exporting country, extends a loan directly to a foreign buyer or to a bank in the importing country to pay for the purchase of goods and services from the exporting country. Also known as financial credit. This term does not refer to credit extended directly from the buyer to the seller (for example, through advance payment for goods and services).
Related Definitions in the Project: The Procurement
