Buyer’s credit is one of the classic export financing products. Its specific feature is that the recipient of the credit (loan) is not the Hungarian exporter, but its foreign buyer (customer), and the buyer pays the consideration (price) for the goods or services from the buyer’s credit provided by the export credit agency operating in the country of the seller/exporter. The amount of the credit is disbursed (or partially disbursed) to the Hungarian exporter when the buyer certifies the fulfilment of the export contract (or its partial fulfilment, depending on the agreement). This special financing solution has several advantages for exporting entities: firstly, it ensures that the company’s foreign buyer (customer) has adequate cash to pay for the goods and that it (the exporter) receives the purchase price once the goods are delivered, and secondly, it improves the competitiveness of the Hungarian company internationally, as – to go with its products or services – it can offer its customer a financial solution, in line with latest international interest rates. Thus, besides stimulating international trade, this method of export-agency financing plays an important role in creating a level playing field at global level for companies involved in cross-border trade and ensures that the products and services of Hungarian exporters are not left at a competitive disadvantage on the world market due to a lack of financing.
A precondition for buyer credit financing is that the requisite Hungarian “content” of the goods or services be specified in the foreign trade contract in a verifiable manner, and that the buyer’s credit is provided by EXIM Hungary together with what we call export credit insurance, to cover the risk of non-payment by the foreign buyer.