Oditor, Vol. VII, No. 03/2021

FORFETING AS A MODERN FORM OF FINANCING A COMPANY
Jelena Vapa-Tankosić[1], Marko Ivaniš[2], Dejan Vukosavljević[3]

Original scientific paper
UDK: 336.777.7
339.56.055
doi: 10.5937/Oditor2103007V
JEL: F10, G3

Abstract

Forfeiting technique includes the purchase of outstanding long-term foreign trade receivables that meet certain conditions in terms of maturity and type. In that way, the company has the opportunity to sell to a commercial bank or some other specialized financial body for forfeiting its foreign trade claim, which is not burdened by the possibility of recourse claims of other persons against the buyer of the claim, which is provided by some collateral. Through the forfeiting transaction, the company eliminates possible losses due to illiquidity, risks of rising interest rates in the future, risks based on fluctuating exchange rates, risk based on changes in creditworthiness and financial position of debtors, eliminates administrative problems and associated costs of debt collection. This paper aims to point out the process of applying the forfeiting technique and the discount rate mechanisms depending on the risk, repayment period, currency and the amount of the transaction itself.

Key words: forfeting, purchase of receivables, financial market.


[1] Full Professor Jelena Vapa-Tankosic PhD, Faculty of Economics and Engineering Management in Novi Sad, Cvećarska street no. 2, 21000 Novi Sad, Serbia, E-mail: jvapa@gmail.com
[2] Full Professor Marko Ivaniš PhD, Faculty of Economics and Engineering Management in Novi Sad, Cvećarska street no. 2, 21000 Novi Sad, Serbia, E-mail: drmivanis@gmail.com
[3] Associate Professor Dejan Vukosavljević PhD, Faculty of Management, Njegoševa no. 1a, 21205 Sremski Karlovci, Serbia, E-mail: vukosavljevic.dejan@gmail.com