Importers and exporters are
shifting towards less formal
trade finance processes,
according to Herman
Bezuidenhout, CEO of global
trade intermediary BeztForex.
“There is a move away
from letters of credit as South
African companies and
their counterparts become
comfortable with each other…
and open account trade is
increasing,” he said.
“Supplier credit is the most
widely used form of trade
finance as it usually has
very little cost implications
with zero impact on formal
facilities.”
Bezuidenhout said a major
challenge facing importers
and exporters was how
to mitigate the impact of
volatile currency markets
on cost competitiveness and
profitability.
“In our experience, few
companies have any formal
risk management framework
document in place and
executives rely on hope and
greed in the execution of
foreign exchange exposures.
Less formal options favoured
Comments | 0
