Arasan - Trade Finance Consultant

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a messaging network used by banks and financial institutions to exchange information related to trade finance instruments. There are various SWIFT messages available in trade finance instruments, including: MT700: This message is used for issuing a letter of credit (LC) and contains details such as the LC amount, expiry date, beneficiary details, and terms and conditions. MT701: This message is used for amending an LC and contains details of the changes to be made to the original LC. MT707: This message is used for confirming an LC and contains details of the confirming bank, including their commitment to pay the beneficiary. MT710: This message is used for a bank to bank reimbursement of an LC and contains details of the reimbursement claim. MT711: This message is used for advising the beneficiary of an LC and contains details of the LC, such as the amount, expiry date, and issuing bank. MT720: This message is used

Monetization is a financial strategy commonly used in trade finance to provide short-term liquidity to exporters. The process involves converting a future payment obligation (such as an invoice or a letter of credit) into cash by selling it to a financial institution at a discount. The monetization process typically involves the following steps: The exporter completes a trade transaction with an importer and receives a future payment obligation, such as an invoice or a letter of credit, for the goods or services supplied. The exporter seeks short-term liquidity and decides to monetize the payment obligation. The exporter contacts a financial institution (usually a bank or a specialized financial services company) that offers monetization services. The financial institution evaluates the creditworthiness of the importer and the payment obligation to determine the discount rate at which it is willing to purchase the payment obligation. If the financial institution agrees to monetize the