WHAT IS LETTER OF CREDIT?

What is letter of credit?

Letter of credit is a promissory document that serve as a guarantee between a buyer and a seller who base in different countries. Basically, letter of credit is required when a buyer and a seller who based in different countries have no transaction history.  Letter of credit is used when exporter  do not have confidence in the credit worthiness of a buyer ( importer) or the importer do not totally trust the exporter.

Read how does letter of credit works