International
Trade Financing
By Nguyen Diep Ha, MSc
What is meant by the name?
The purpose of this module is to explain how international trade
(i.e. export and import) is financed, more particularly how
international trade financing decisions are formed and related to
other aspects of financial management
Trade Finance
choices
Documents in
international trade
transactions
Capital
structure
Terms of
payment
Working capital
management
Risks
Module outline
I. Introduction to Terms of payment
II. Trade financing alternatives
III. Trade risk analysis and Risk management
options
IV. International trade finance designing
References
Grath Anders.
The handbook of
International Trade
and Finance.
Kogan Page, 2008
References
Bishop, Eric.
Finance of
international trade.
ButterworthHeinemann, 2004.
References
Bhogal, Tarsem and
Trivedi, Arun Kumar.
International Trade
Finance: A pragmatic
approach.
Palgrave Macmillan,
2008
Assessment
• 10% attendance
• 30% mid-term project
• 60% final exam
Mid-term project
• Each team takes on one side of a simulated
international commercial transaction
• The purpose is to simulate the process of making
trade decisions in reality, therefore each team must
perform all the necessary jobs to reach the final
decision from researching on partner, making order,
risk analysis, alternative solutions to the final design
• By the end of the module, each team will have to
present their choices supported by their liaisons and
their documents.
Mid-term project
Your mid-term report should include (at least):
1. A short description of your company and your
partner's position
2. A short description of all alternatives you are
considering and your final design for terms of
payment and choice of financing
3. A detailed explanation of why you chose that
particular option
4. An appendix of all related data to support your
choice.
Mid term project
• Deadline:
- Soft copies should be sent to my email at
nguyendiepha@gmail.com no later than 12pm
9th March 2014
- Hard copies will be submitted on the day of
presentation
Mid-term project pairs
• Vinamilk import milk powder from Fonterra,
NZ after the scandal
• Hau Giang Pharmaceutical (DHG) import
paracetamol from Mallinckrodt INC, USA on a
regular basis
• Agifish export catfish to Agifish USA., Inc, a
100% subsidiary of Agifish
• Hutchinson SNC from France approach Dong
Phu Rubber to import rubber for the first time