Mezra Forfaiting – What is forfaiting ?
lThe notes are
initially given to the exporter at the time of shipment (or performance of other services) and become its property. The notes represent
the unconditional and
irrevocable commitment of the buyer and/or
its bank (where the latter has added its guarantee) to pay the notes at maturity.
lThe payment of these
notes is independent of, and without any direct relationship to, the underlying commercial contract, which usually provides
for other remedies to ensure
the exporter’s due performance.