The 3 kinds of risk in international trade finance


International Trade Finance Risks

International Trade Finance RisksTrading internationally involves risks beyond the normal risks of doing business in domestic markets.

Late or non-delivery of goods, foreign exchange and country risk offer new and unique challenges to the would-be international trader.

Despite such risks, and given the global choices available, the rewards of international business—and the imperatives of competition—are leading an increasing number of companies to explore and conquer foreign markets.

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To deal successfully with risk, the importer or exporter must first understand the risk tolerance of their organization, and then determine the nature of the risk involved in a potential transaction. After doing a thorough assessment, the firm can develop measures to reduce, manage or optimize the risks identified. The following are the three most common types of risk encountered in international commerce:

1. Commercial risk
2. Country risk
3. Foreign exchange

Learn more about these 3 risks in this video excerpt from the online FITTskills International Trade Finance training course.

This content is an excerpt from the International Trade Finance course textbook. Enhance your knowledge and credibility with the leading international trade training and certification experts.

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About the author

Author: Jacob Varghese

Jacob is the VP of Marketing and Technology at the Forum for International Trade Training. Focused on improving the customer experience. A Content chef; words, images, some code and a healthy serving of web analytics.

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