Department of Agriculture"s (USDA) Export Credit guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S.
agricultural products, while providing competitive credit terms to buyers.
By reducing financial risk to lenders,
credit guarantees encourage exports to buyers in countires-mailnly developing countries- that have sufficient financial strenght to have foreign exchange available for scheduled payments.
The program guarantess credit extended by the private banking sector in the U.S.
(or, less commonly, by the U.S.
exporter) to approved foreign banks using dollar-denominated, irrevocable letters of credit for purchases of U.S.
food and agricultural products by foreign buyers.
USDA"s Foreign Agricultural Service (FAS) administers the program on behalf of the Commodity Credit Corporation (CCC), which issues the credit guarantees.
GSM 102 covers credit terms of up tot hree year; maximum terms may vary by country.