- 20 Marks
Question
The African Continental Free Trade Area (AfCFTA) is organizing training programs to grow the Small and Medium-sized Enterprises (SMEs) and most importantly to deepen their understanding on international trade and how they can take advantage of the banking system for efficient operation and expansion of their businesses. As Head of Trade Finance of your bank, you have been engaged as a resource person by (AfCFTA) to take Chief Operating Officers of these SMEs on the following topic: “The Role of Banks in International Trade”
REQUIRED:
List these roles (in bullet points only) under the various roles for one mark each.
Note: Long and detailed descriptions are not required.
[Total marks 20]
Answer
- Provide pre-shipment financing to exporters.
- Offer post-shipment financing through bill discounting.
- Issue letters of credit for secure payments.
- Handle documentary collections (D/P and D/A).
- Facilitate foreign exchange services and hedging.
- Issue bank guarantees and performance bonds.
- Provide standby letters of credit.
- Offer trade advisory on regulations and markets.
- Conduct status enquiries on overseas parties.
- Arrange insurance through partners.
- Facilitate payment systems like SWIFT and CHAPS.
- Offer electronic banking for trade transactions.
- Provide forfaiting for medium-term finance.
- Support factoring and invoice discounting.
- Assist with ECGC or similar export credit guarantees.
- Promote trade through introductions and networks.
- Handle import financing like acceptance credits.
- Offer countertrade facilitation when applicable.
- Provide information on economic conditions abroad.
- Support business travel with forex and cards.
- Tags: AfCFTA, Banks Role, Financing, International trade, Payment Services, Risk Management, SMEs
- Level: Level 3
- Uploader: Samuel Duah