The African Credit Risk A Study of Country and Customer – level Risk Ratings and Their Implication for International Trade
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| Format: | Thesis |
| Kulcsszavak: | Africa Bank Guarantee Credit Risk Risk Rating Model Trade Finance |
| Online Access: | http://dolgozattar.uni-bge.hu/54025 |
| Abstract: | The purpose of this thesis is to examine the significance of credit risk rating in Africa and how it can promote stability and economic development. The first part outlines the thesis' goal and explains why credit risk rating is important in Africa. The second chapter gives a short summary about the content and the purpose of the thesis.The third part defines credit risk rating and gives an overview of trade finance including export credit agencies, incoterms, documentation required for cross-border transaction and defines AML and KYC processes.The fourth chapter introduces trade finance guarantee instruments such as bank guarantee, letter of credit and export credit insurance. This chapter gives a wide outline of each instrument.The fifth section examines credit risk rating at the national level in Africa. Firstly, it gives an overview about credit scores using data from the most well-known agencies, Standard and Poor, Moody’s and Flitch. Chapter demonstrates an overview of the variables that influence credit risk rating at the national level using four countries, Egypt, South Africa, Ethiopia and Mauritius as an example.The sixth part examines customer-level credit risk rating, including an overview of the elements influencing credit risk rating on a customer level and the difficulties associated with conducting customer-level credit risk rating in Africa, highlighting the importance of financial data, while showing the relationship between country level ratings.The seventh chapter introduces statistical means for models assessing credit risk with examples for each.The eights section introduces an economic model that includes a fictive client. Examining customer, and country rating, followed by the creation of an own simplified credit policy using quantitative variables such as fictive financial statements, different financial ratios and qualitative variables such as political stability and economic situation. The end of this chapter is the implementation of the credit policy in SAP, naming widely used SAP transactions with a focus on determining control points and further actions.The final part gives a summary while emphasizing again the significance of credit risk rating for the stability and development of the African economy. |
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