ORGANIZATION OF STRUCTURED EXPORT FINANCING BY COMMERCIAL BANKS IN RUSSIAN FEDERATION
This paper tries to define the concept of Export Finance and establish if the Export Financing is cost-effective way to raise capital and how is it organized in the Russian Federation. In order to do so, several methods have been used: the related literature has been studied, numerical analysis of economic-efficience of export financing has been prepared based on the real example and three interviews with experts in Export Finance have been conducted. The findings suggests that Export Financing is an attractive way of financing in a current economic environment and there is no credible alternative to it on the Russian market. Moreover, the analysis show that despite of the number of advantages, that Export Financing have, there are still some gaps in Export Financing, but in general, Export Finance area is developing and becoming more and more popular among russian importers and exporters.
An investment activity of domestic enterprises is one of the major factors in the development and stability of the national economy. In strategic aspect, an increasing of investments, especially investments in a fixed capital, is a key element in determining the possibility of solving the whole range of problems of economic development.
Domestic practice of trade finance organization lags behind the requirements of a modern economy. There are a limited number of large banks in Russia with international accepted credit ratings that are engaged in international trade finance. For the development of the practice of Russian banks in this direction, it is of great importance not only studying an international experience, modern tools and mechanisms for trade finance, but also a clear understanding that a use of trade finance is profitable for both banks and its customers. This leads into the first research question:
What are the benefits of export finance for both banks and borrowers and is it an effective option to raise capital in the Russian Federation?
Export Finance, as an element of the investigation is not studied enough and causes a lot of practical issues. This happens for various reasons, including a lack of clear understanding of functioning of forms and mechanisms for attracting and providing trade finance, ignorance of counterparties and sources of funding, lack of experience in structuring trade transactions involving Export Finance and as a consequence, the lack of understanding of the effectiveness of the tools associated with financing among industrial managers and bank managers. Second question I want to answer is:
What are the typical models of Export Financing in the Russian Federation and how does it have to be structured?
The purpose of this thesis is to identify an Export Financing as a powerful competitive tool for executing strategic transactions and to ensure cost-effectiveness of long-term lending of foreign trade operations.