Foreign Trade Finance (Course, Master)

EENI Business School & HA University

Syllabus of the Online Subject: International Trade Finance. Country risk.

  1. Introduction to international trade finance
  2. Export/import financing
  3. Pre-shipment finance
  4. International risk: payment, foreign exchange, counterparty, and delivery
  5. Country risk
  6. Sovereign risk
  7. Credit ratings
  8. Evaluation and classification of Country risk
  9. Corruption perceptions index
  10. Export credits (OECD)
  11. Case Study
    1. The case of Thailand and South Africa
    2. Introduction to Islamic Banking
  12. FOREX
  13. International Bonds and Guarantees

The aims of the Online Subject “International Trade Finance” are the following:

  1. To familiarise the student with the various methods of finance both for exports and imports
  2. To understand the risks associated with foreign trade operations
  3. To know how to manage pre-financing and export financing

The eLearning Subject “International Trade Finance” is part of the following Online Higher Education Programs taught by EENI Business School & HA University:
  1. Course: Payment Methods
  2. Masters: International Business, Foreign Trade and Marketing
  3. Doctorate in International Trade
  4. Diploma in International Trade

Online Student (Master International Business)

Learning materials in Master in International Business in English or Study, Master in International Business in French Financement Study Master Doctorate Business in Spanish Financiación Masters Foreign Trade in Portuguese Financiamento

Credits of the Online Subject “International Trade Finance”: 4 ECTS.

Area of Knowledge: Foreign trade.

Example of the Online Subject- International Trade Finance:
International Trade Finance (Master)

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Paterson Ngatchou: EENI Academic Coordinator for Anglophone Countries
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Description of the Online Subject: International Trade Finance

There are two basic forms of International Trade Finance transactions:

  1. Import finance
  2. Export finance

Both can be performed in the currency of the exporter (for example, Euros) or any other fully convertible currency agreed by both parties.

In the second case, the company assumes certain risks as the exchange rates difference. However, it can also profit from trading in another currency if there is a rise in foreign currency value.

Financial transactions in foreign trade can be performed in the currency of the exporter/importer or a third currency.

In many cases, export companies must facilitate financing for their clients mainly due to the market requirements. In Foreign Exchange Market, dealers trade in currencies. Product and service exports, foreign direct investment, and foreign loans forms the currency supply whereas currency demand consists of imports, foreign direct investment and other factors.

These operations stimulate the buying and selling of currencies in a market governed by supply and demand. If a payment for a service provided or for a product delivered to a foreign client is in a currency other than in which the exporter usually operates, the exporter is exposed to the risk of exchange rate fluctuation.

In any exporting or importing transaction there is a range of risks to be considered including:

  1. Payment Risk
  2. Performance Risk
  3. Foreign Exchange Risk
  4. Interest Rate Risk
  5. Counterparty/Bank Risk
  6. Country Risk
  7. Delivery Risk

The underlying commercial contract should clearly state the

  1. Description of the products
  2. Delivery terms, when and by what means the payment is to be made
  3. Required documents, which will allow the importer to obtain the delivery of the goods and to arrange clearance through customs
  4. Currency in which settlement is to be effected and
  5. Any specific requirements attaching to the shipment.

Country Risk

Country risk is caused by political (unwillingness to repay) or economic (inability to repay) events in a particular country. Normally, the country risk is measured as transfer risk or cross-border risk, which is another terminology used to describe country risk. The central element of transfer risk is the possibility that the borrower may not be able to secure foreign exchange to service its external debt due to economic or political risks of a country, despite the accessibility of local currency.

The Sovereign risk is the risk of the Government or Government-related entity making payment. The Country risk embodies both govern and commercial risk.

The Corruption perceptions index measures the perceived level of public-sector corruption in 180 countries economies.

Corruption Perceptions (TI)

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