5. Credit Risk (Ba) * Contents: Large distances can make it difficult for an exporter to verify the creditworthiness and reputation of an importer or buyer. A false buyer can increase the risk of non-payment, late payment, or even straightforward fraud. It is necessary for an exporter to determine the creditworthiness of all foreign buyers if considering extending credit terms overseas.III. ConclusionOverseas investing involves a careful analysis of the economic, political and business risks that might result in unexpected investment losses. This country risk analysis is a fundamental step in building and monitoring an international portfolio. Investors that use the many excellent information sources available to evaluate country risk will be better prepared when constructing their international portfolios.Managing export risks is a process of thinking systematically about all possible undesirable outcomes before they happen and then setting up procedures that will either avoid or minimise these risks, or help you to cope with their impact.There are six basic elements in the risk management process:• Establish the context of the risks• Identify the risks• Assess probability and possible consequences of the risks• Develop strategies to mitigate these risks• Monitor and review the outcomes• Communicate and consult with all parties involved.Keep your risk management analysis clear and simple, and ensure it is understood by everyone in the company who is involved in exporting.
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