In international trade transactions one of the primary concerns of exporters is payment for goods sold to foreign buyers. Country risk and customer risk are two components of the exporter's overall credit risk. One effective means of reducing these risks is through the choice of an appropriate...

A letter of credit (L/C), in international trade may be described as an instrument of finance carrying a conditional guarantee of payment from the overseas (buyer's) bank to the seller. Consequently, a L/C is desirable in high value and/or high risk transactions. The guarantee is conditional...