CASE SCENARIO
- Grain/Sugar/Rice is grown once a year and harvested in 2 months
- Miller requires grain etc. throughout the year on a monthly basis of 1 000 tons per month
- Miller does not want the grain etc. on its Balance Sheet
- Trader / Importer wishes to purchase the 12 000 tons FOB from the Exporter and supply this to the Miller on a monthly basis
- The Trader does not have the Balance Sheet to warrant the loan
- The Trader is the fund’s Client
- The Fund wants to lend to the Trade
REQUIRED ACTION
- To Devise an off balance sheet financing structure to accommodate the requirement of both the Fund’s lending risk and the Clients requirement
TYPICAL CLIENT BASE
- Traders of soft (wheat, maize, soya, sunflower, sugar, fertilizer etc),and
- hard commodities (non precious metals, coal, etc)
- Suppliers of generalized products eg hardware, steel, manufactured goods
- Suppliers of specialized product for creditworthy off-takers
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