Question

Forfaiting does not convert credit sale into cash for exporter

Answer 1

False.

The word forfeiting is derived from an old French word 'forfait', that intends to surrender right of someone on something to another person.  

It is a substitute method for funding / financing that empowers exporters to get quick money by moving their medium receivables – the sum a merchant owes the exporter – at a discounted price through a mediator. The exporter wipes out any risk by making the deal without plan of action / recourse. It has no obligation with respect to the shipper's conceivable default on the receivables.  

With this, the export can allow credit to his purchasers openly, and in this manner, be increasingly competent in the market.