International Trade and Inherent Risks Definition Need for Trade Finance Players and stake holders Elements of Trade Finance Traditional Trending Trade Financing Agencies Terminology Inco Terms Summary

3. TRADE FINANCE –An IntroductionAgenda
 Course content
 International Trade and Inherent Risks
 Definition
 Need for Trade Finance
 Players and stake holders
 Elements of Trade Finance
 Traditional
 Trending
 Trade Financing Agencies
 Terminology
 Inco Terms
 Summary

4. TRADE FINANCE –Course ContentTable of contents
 Introduction to Trade Finance
 Documentary Credits
 Letters of Credit
 Exchange Rate Maintenance
 Forward Contracts
 Foreign Bills Remittances
 Pre and post shipment credit
 Bank Guarantees

5. TF – A Science or a set of
activities??

6. TRADE FINANCE – An Introduction
Trade
Domestic
International
The nature of relationship between the importer and
exporter is critical to understanding the methods of
import-export financing utilized in industry.

7. INTERNATIONAL TRADE
 Role of Trade Finance in International Trade
 Risks in International Trade
 Political
 Legal
 Commercial
International trade is, in principle, not different from
domestic trade as the motivation and the behavior of
parties involved in a trade do not change fundamentally
regardless of whether trade is across a border or not.

8. TRADE FINANCE - DEFINITION
 Basically related to 'Domestic as well as
International Trade Transaction'.
 It relates to the movement, purchase and/or sale of
goods or services and 'know-how‘.
 Evolution of Trade Finance
 How Trade Finance works?

9. TRADE FINANCE - Need
 Strengthen supplier relationships
 secure supplies of key materials
 standardizing or extend payment terms
 Address funding and risk mitigation needs
 via tailored on and off balance sheet financing solutions in the open-
account trade environment
 Improve working capital efficiency
 through accelerated cash flows generated by receiving early payments
on a true-sale basis
 Strategically manage increasing sales volumes and internal credit limits
against key buyers
 Gain visibility into transactions with real-time or scheduled reporting
utilizing our proprietary platform

10. TRADE FINANCE – Players &
Stakeholders
 Importers & Exporters
 Bankers & Financiers
 Insurers & Export Credit Agencies
 Other Service Providers

11. TRADE FINANCE - Elements
 TRADITIONAL
 Letters of Credit
 Bank Guarantees
 Bills
 Bonds
 Bank to Bank Reimbursements

12. TRADE FINANCE - Elements
 TRENDING
 Open Account Transactions
 Factoring
 Forfaiting
 Structured Commodity Financing

13. TRADE FINANCE - Agencies
 Export credit agencies
 Insurance agencies
 Bilateral and Multi lateral agencies

14. TRADE FINANCE - Terminology
 Supplier finance
 Receivable finance
 Receivable purchase
 Post import finance
 Pre export finance

16. INCO TERMS
 Definition
 Accepted worldwide
 Intention
 History of Inco Terms
 Present position

17. INCO TERMS
 Inco Terms 2010
 General Transport
 Sea and Inland Waterway
 Allocation of costs to buyer/seller
 Elimination / Replacement of terms
First published in 1936, the Incoterms rules have been
periodically updated, with the eighth version—
Incoterms'—having been published on January 1, 2011.
"Incoterms" is a registered trademark of the ICC.

18. SUMMARY
 Key Business Principles
 Definition of Trade Finance
 Trade Finance and International Trade
 Trade Finance and Financial sector
 Financial crisis and Trade Finance
 Inco Terms