INTRODUCTION BASIC TRADE FINANCE
International trade finance is crucial for professionals who want to master the key knowledge, calculations and documentation needed in business and international trade.
The case study will provide you with “real-life” situations and allow you to apply the content and knowledge you have acquired during this course, specifically showcasing the logic and ease of trade finance products and which ones to use under various circumstances.
On completion of the course, participants will have developed a good foundational understanding of global trade and how companies settle their cross border commercial activities, basic needs are, identify the risks as well as financial instruments available to mitigate those risks.
Who should attend: New joiners in banks, corporates, and financial institutions. Staff seeking to refresh their trade finance knowledge
LEARNING OBJECTIVES
On completion of the programme, participants will be able to:-
- Understanding the mechanics of international trade,
- Understand Trade Documentation and Payment Methods
- Master the Basics of Trade Financing Instruments such as Letters of Credit, Guarantees, and Collections
- Get an overview of ICC Incoterms 2020
- Mastering common trade instruments like documentary collections and letters of credit, identifying and mitigating trade risks, gaining knowledge of various payment and financing methods
- Applying principles of trade finance to successfully offer trade services
TRAINING APPROACH
Where appropriate, activities will include the following:
- Lecture & Videos
- Faciliated Group Discussions & Spot Quiz
- Practical hands on learning activity using case studies
Note: Participants are required to bring laptop for excel exercises and powerpoint presentation
COURSE OUTLINE
The key content of the program includes the following:
Module 1: Overview and concept
- Flow of international trade and sources of finance and how business settle payments for their settle their cross border commercial activities
- Common Terms associated with International Trade
- Understanding Risks in Trade Finance
- Trade Finance as Working Capital Management
- Importance of trade finance in international trade
- Key players: banks, importers, exporters, insurers, shipping companies
- Overview of trade cycle: from contract to payment
Module 2: Core Trade Finance Instruments
- Documentary Collection (D/P, D/A)
- Documentary Credit (Letters of Credit)
- Open Account vs Advance Payment
- Bank Guarantees & Standby Letters of Credit (LCs)
- Classification of payment methods and factors which determine choice of payment
- Deferred Payment Undertakings and Bank Guarantees
Module 3: Documentary collection methods
- Process flow
- Roles and parties in collection methods
- Collection instruction by banks
- Responsibilities in the export/outward collection desk of a bank
- Responsibilities in the import/inward collection desk of a bank
- Job set up for import bills
Module 4: Risks in International Trade & Risk Mitigation
- Types of risks: commercial, country, currency, transport, fraud
- Role of trade finance in reducing risk
- Case discussion: Matching risk with the right instrument
Module 5: Key Processes & Documents in Trade Finance
- Common trade documents: invoice, bill of lading, packing list, certificate of origin, insurance certificate
- Flow of documents in LC and Collection transactions
- Hands-on activity: mapping document flow for a sample shipment
