Export Letter of Credit carries the credit risks of the issuing bank and the political risks of the issuing bank’s country. A letter of credit may also be referred to as a documentary credit.
An irrevocable letter of credit may not be canceled or changed without any consent of all parties involved (importer, exporter and the issuing bank).
It is payable upon presentation of certain documents.
It can be transferred to a third party if stipulated in the letter of credit.
Namibian exporter is assured of receiving a payment if it complies with all terms and conditions of the letter of credit.
Exporter relies upon the creditworthiness of the issuing bank.
The exporter may offer extended terms of payment through a letter of credit.