1.
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

2.
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

3.
TF – A Science or a set of
activities??

4.
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.

5.
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.

6.
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?

7.
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

8.
TRADE FINANCE – Players &
Stakeholders
 Importers & Exporters
 Bankers & Financiers
 Insurers & Export Credit Agencies
 Other Service Providers

9.
TRADE FINANCE - Elements
 TRADITIONAL
 Letters of Credit
 Bank Guarantees
 Bills
 Bonds
 Bank to Bank Reimbursements

10.
TRADE FINANCE - Elements
 TRENDING
 Open Account Transactions
 Factoring
 Forfaiting
 Structured Commodity Financing

11.
TRADE FINANCE - Agencies
 Export credit agencies
 Insurance agencies
 Bilateral and Multi lateral agencies

12.
TRADE FINANCE - Terminology
 Supplier finance
 Receivable finance
 Receivable purchase
 Post import finance
 Pre export finance

13.
INCO TERMS
 Definition
 Accepted worldwide
 Intention
 History of Inco Terms
 Present position

14.
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.

15.
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