International credit is the movement of borrowed capital across the national borders of countries between subjects of international economic activity, associated with the temporary transfer of commodity currency values โโon terms of repayment, maturity and interest payments. International credit provides the movement of surplus capital, which benefits both parties. With the development of foreign economic relations, the role of international credit is constantly growing, contributing to economic development and the development of the global trading market.
International credit - modern types and forms.
The most common forms of international credit are commodity (aka commercial) and foreign currency loans.
International commercial credit is issued to pay for goods or services and is most often strictly targeted. Most often, it is implemented as a deferment of payment by the exporter to the importer. Such loans can last from 2 to 7 years and are determined by the attractiveness of cooperation with a particular company, its reliability and the level of interest of the lender in international relations with the borrower. Most often, it is issued in the form of an open account or bill of exchange. One of the most common forms of commercial credit is leasing - leasing of certain property (fixed assets) on the terms of subsequent repurchase. This type of lending is especially important for developing countries, as it reduces the outflow of currency from the country and reduces the balance of payments deficit. Moreover, in this way developing countries gain access to new technologies that are too expensive for their own development.
Banking international financial credit of the importer and exporter is realized in the form of a debt secured by goods and goods documents, in rare cases without collateral through a guarantor. Thus, the bank acts as a guarantor of the transaction if one of the parties cannot provide material security at the date of the transaction. For its service, the bank receives a certain commission, along the way, it can also provide foreign exchange services.
Bonded international credit is one of the most common types of international credit. Used to obtain long-term loans from international or national market capital. The issue and placement of such a loan is carried out by the bank manager, headed by a manager who acts as a counterparty to the lender and is responsible for its organization and distribution. International public credit is a form of lending designed to provide financial assistance to developing countries, as well as countries with budget deficits. The most authoritative in this area of โโlending are specially created for this purpose international currency funds, banks and organizations. They accumulate large financial resources and, under certain conditions, lend them to needy states. The most famous organizations specializing in international financial credit are the International Monetary Fund, the World Bank for Reconstruction and Development, and regional development banks. They allocate financial assistance on the basis of urgency and repayment, getting the opportunity to influence the political and economic processes within the credited state.
Also, in certain cases, there is an international targeted loan aimed at financing certain programs.
International financial credit can be issued in the currency of the importer or exporter, the currency of a third country, as well as in any generally recognized collective currency.