Export Credit

Export credit is credit extended to the purchaser of an export. The credit may be provided by the firm that is selling the export (essentially by shipping the product before receiving payment for it) or it may be offered as a loan by a bank of a government agency in the company that is exporting the goods. By setting a low interest rate on export credit, a country can essentially subsidize an export—without providing a direct subsidy.

For the importing company, export credit can allow them to purchase more goods than their cash on hand would otherwise allow, so that the arrangement benefits both the importer and the exporter, but it disadvantages competing exporters who do not offer access to export credit.