Effective Tools For Export Credit Risk Analysis

The need to grow the non-oil export business volume has become very imperative for Nigerian banks and this requires advancing more financing facilities to businesses that operates in this sector.

However, this cannot be achieved by using the traditional credit risk analysis model that is designed for other sectors of the economy. This is because the traditional credit analysis model being used by many banks is a very wrong yardstick that brings in many unnecessary requirement that are demanded from the exporters in the process of export credit assessment.

This consequently leads to the rejection good credit from credible exporters because the wrong yardstick is being used to judge the credibility of the promoters, the products, the parties involved and other peculiarities of the transaction. This has therefore led to a reduction in the number of credible exporters that can be financed by the bank.

This consulting service therefore involves development of a framework for export focused credit scoring system that is adapted for the bank to help its staff do a thorough credit risk analysis using the appropriate yardsticks for both pre and post export financing request.

This therefore enables the bank to be more flexible in export business finance in order to accommodate more exporters and yet prevent the incidence of non-performing loans and bad debts. This will consequently stimulate the much-desired growth of non-oil export customers, export volume and thus export proceeds that come to the bank.

FOR WHOM

For Banks