Risk Management

Presented by :
Asst.Prof.U.J.Pithadiya
 Types of Risk

• Country Risk

• Credit Risk

• Cargo Risk
 Country Risk

Political Risk Commercial Risk Financial Risk

 Country Risk

Political Risk Commercial Risk Financial Risk

- Transfer Risk

- Operational Risk

- Ownership Control Risk

 Country Risk

Political Risk Commercial Risk Financial Risk

Factors :
• Political stability

• Integration into the world system

• Ethnic & regulation stability

• Expropriation

• Blockage of funds

• Corruption
 Country Risk

Political Risk Commercial Risk Financial Risk

 Country Risk

Political Risk Commercial Risk Financial Risk

- Foreign Exchange Risk

Factors :
• Economic health of Country

• Monetary & Fiscal Policies

 Country Risk Assessment Techniques

• Checklist Approach

• Delphi Technique

• Statistical technique

• Spot visits

• Combination of techniques
 Measures to minimize Political & Commercial Risk

• Pre Investment Stage :

 Insurance

 Structuring the Investment

- Business Relations with more than 1 countries

- Enlist local Stakeholders

- J.V with local firms

 Measures to minimize Financial Risk

 Forward Contract
 Future contract

 Option
 Cargo Risk

 Marine Perils

 Extraneous Perils

 War Perils
 ECGC

 7th largest credit insurer of the world in terms of coverage of

national exports.

 Present paid up capital :- Rs. 900 Crores

 Authorized capital :- Rs. 1000 Crores.

 ECGC – Products & Services

For Exporters

Short Term Medium &Long Term

Turnover Based Exposure based

 ECGC – Products & Services - For Exporters :

Short Term

Turnover Based Exposure based

• Shipment Comprehensive Risk • Buyer Exposure Policy

• Small Exporter Policy • IT-Enabled services Policy
• Specific Shipment Policy • Small & M. Enterprises Policy
• Services policy • Software Project Policy
• Export Turnover Policy
• Export Specific Buyer Policy
• Consignment Export Policy
ECGC – Products & Services - For Exporters :

Medium & Long Term

• Construction Works Policy

• Specific Policy for Supply Contract

• Specific Shipment Policy

• Letter of Credit Confirmation Cover

 ECGC – Products & Services

For Banks & FIs

Short Term Medium &Long Term

Pre- Shipment Post- Shipment Export Performance

 ECGC – Products & Services

For Banks & FIs

Short Term Medium &Long Term

Pre- Shipment Post- Shipment Export Performance

Individual Packing Credit

Wholesale Turnover Packing Credit
Branch wise Packing Credit
 ECGC – Products & Services

For Banks & FIs

Short Term Medium &Long Term

Pre- Shipment Post- Shipment Export Performance

Individual Post Shipment

Wholesale Turnover Post Shipment
Export Finance
 ECGC – Products & Services

For Banks & FIs

Short Term Medium &Long Term

Pre- Shipment Post- Shipment Export Performance

Individual Export Performance

Wholesale Turnover
Export Performance
 ECGC – Products & Services

For Banks & FIs

Short Term Medium &Long Term

Individual Packing credit

Individual Post Shipment
Export Performance
Export Finance ( Overseas Lending)
 ECGC – Products & Services

Special Schemes

• Buyer’s Credit Cover

• Lines of Credit Cover
• Transfer Guarantee
• Customer Specific Covers