WHY GENUINE TRADE FINANCE CONSULTANCY COMPANIES NOT INVOLVE IN MONETIZATION - For Your Read

Genuine trade finance consultancy companies may choose not to be involved in the monetization of instruments for a variety of reasons. Here are some possible explanations:



Legal and regulatory risks: Monetizing financial instruments can be a complex and highly regulated activity. There are strict rules around the use of certain types of instruments, such as bank guarantees and standby letters of credit, and engaging in monetization activities may put a consultancy company at risk of violating these rules. There may also be legal risks associated with fraudulent or non-performing instruments.

Reputation: Engaging in monetization activities can damage the reputation of a trade finance consultancy company, particularly if the instruments being monetized turn out to be fraudulent or non-performing. Genuine trade finance consultancy companies may prioritize their reputation and brand image over short-term financial gains.

Ethical considerations: Some trade finance consultancy companies may view monetization activities as unethical or morally questionable. They may believe that monetizing instruments, particularly those that are not intended for monetization, takes advantage of the financial system and creates unnecessary risks for all parties involved.

Focus on core services: Genuine trade finance consultancy companies may choose to focus on their core services, such as advising clients on trade finance transactions, structuring deals, and managing risks. Monetization activities may be seen as a distraction from these core services and may not align with the company's overall strategy.

Overall, there may be various reasons why genuine trade finance consultancy companies choose not to be involved in the monetization of instruments. It is important to note that the decision to engage in monetization activities is a business decision that should be carefully considered based on the company's values, goals, and risk appetite.


Arasan Trade Finance Consultant - +91 9345516057


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