Forfaiting Program

Forfaiting Program – insurance of medium- and long-term export receivables purchased by a bank

Insurance backed by the State Treasury

Key benefits

• we provide banks and financial institutions which have purchased receivables with cover against the risk of non-payment by a foreign buyer
• we are able to provide cover following the commencement of an export contract 
• we provide a high percentage of cover (up to 100% of purchased receivables)
• insurance conditions meet international standards set by the OECD
• banks are able to apply the zero weight risk

Entities eligible
Banks and financial institutions purchasing receivables due to Polish exporters from foreign buyers under a supplier credit extended by the exporter in order to finance the export contract. Credits with repayment terms of two years or more are eligible for cover.    

Subject of the insurance
Undisputed receivables, purchased by a bank or a financial institution, due from foreign debtors and arising from deliveries of goods and services, with repayment term of two years or more.  Receivables should be purchased no later than 7 days prior to the date of payment of the first insured receivable.    

Scope of cover
The cover of medium- and long-term export receivables protects the financial institution against the risk of non-payment by a foreign debtor arising from the occurrence of post-shipment risk.

Post-shipment risk encompasses losses occurring after the delivery of goods or completion of services and concerns the inability to recover receivables due from foreign debtors purchased by a financial institution.

Post-shipment risk encompasses events caused by the occurrence of commercial risk (legally confirmed insolvency of the debtor – bankruptcy, default) and political risk (decisions and legal regulations in the debtor’s country, payment moratoria, inability of making the transfer of receivables, decisions in the insurer’s country, force majeure).

We cover most international markets.

Costs
The insurance premium is usually paid in advance, in the lump sum, and is calculated based on the principal amount of receivables purchased by the financial institution.  We apply premium rates harmonized with rates applied in the OECD countries which have signed the so-called OECD Consensus.