Definition: Forfaiting

External debt - IMF

A mechanism, most commonly used in medium- and long-term credit, involving the purchase of promissory notes or bills of exchange by the forfaiter, at a discount. Banks or other financial services entities often own forfait companies.
Source:
International Monetary Fund (IMF), "External Debt Statistics: Guide for Compilers and Users; Appendix III. Glossary of External Debt Terms", Washington D.C., 2003
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