Meaning of credit risk, Marketing Research

Assignment Help:

MEANING OF CREDIT RISK : Competition In foreign markets is keener than in the domestic market. Overseas customers are sought after by exporter from many countries. Competition is getting keener still due to an all round effort on the part of all countries to increase their exports. Indian exporters have to compete with exporters from other countries not only in respect of quality, price, delivery schedules, etc., but also in respect of payment terms. Their success would depend upon the ability to offer competitive terms of credit to the foreign buyer's terms of credit on par with those offered by exporters from compacting countries. Risks are inherent all credit transactions but more so, in export transaction. The fact that the buyer may not pay either due to insolvency or for any other- reason exposes the exporter to the credit risks Credit risk may arise even in cases where tile buyer's credit standing that has been thoroughly investigated. Too cautious an attitude in evaluating buyers may result in loss of hand to get business opportunities. Hence, credit risk is unavoidable especially in export business. Credit risk is greater in export transactions because reliable information about foreign buyers is difficult to obtain and hence, it is difficult to evaluate their credit worthiness. Credit risk has assumed large proportions today not only because the volume of export transactions has

Become larger but also because far-reaching political and economic changes that are sweeping the world. An outbreak of war civil war, coup or an insurrection may block or delay the payment for goods exported. Balance of Payment difficulties may lead to transfer delays. And all this is possible even when the buyer is fully in a position to pay. In addition one has to contend with the possibilities of the insolvency or protected default of the buyers. In recent years, there has been significant incense in insolvencies and business failures even in many developed countries. In such a gig risk situation export credit insurance can be of immense help to ( i ) exporters and (ii) the banks who provide finance for the export transaction.

 


Related Discussions:- Meaning of credit risk

Currency options-foreign exchange risks, Currency Options : As you have le...

Currency Options : As you have learnt the forward contract protects the interest of the holder against the risk of adverse movements in exchange rates. At the same time, the contr

Stages of shipment, STAGES OF SHIPMENT : For effecting shipment from ports...

STAGES OF SHIPMENT : For effecting shipment from ports in India, the exporter, generally through his clearing and forwarding agent, has to comply with procedural formalities of th

Definition of exchange rate, Definition of Exchange Rate : A foreign excha...

Definition of Exchange Rate : A foreign exchange rate is simply the price of one country's money in terms of another country's money. In other words, the rate at which one country

Methods of dispute settlement , METHODS OF DISPUTE SETTLEMENT : There are ...

METHODS OF DISPUTE SETTLEMENT : There are many reasons due to which a dispute may arise between an exporter and an I importer. A common cause for dispute relates to quality. Und

Determine the primary editing problem, Determine the primary editing proble...

Determine the primary editing problem One of the primary editing problem concerns with faking of an interview. Such fake interviews are difficult to spot till they come to edit

How can the marketing organization raise the likelihood, Q. How can the mar...

Q. How can the marketing organization raise the likelihood? At this time the consumer compares the brands as well as products that are in their evoked set. How can the marketin

Statutory basis, STATUTORY BASIS : Exchange control was introduced in Indi...

STATUTORY BASIS : Exchange control was introduced in India with the outbreak of second World War on September 3, 1939. This was done by virtual of the emergency powers derived u

Procedure to obtain export licence, Procedure to obtain Export Licence : An...

Procedure to obtain Export Licence : An application for grant of export licence in respect of items mentioned in the EXIM policy may be made in the prescribed form to the Director

Sources of information comprise, Once the buyer has recognised a problem th...

Once the buyer has recognised a problem they search for information on products and services that can solve that problem. Belch and Belch (2007) describe that consumers undertake b

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd