GLOBALIZATION AND CREDIT MANAGEMENT

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GLOBALIZATION AND CREDIT MANAGEMENT

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Slide 1: 

1 GLOBALIZATION AND CREDIT MANAGEMENT: ITS ROLES IN THE ECONOMY AND ORGANIZATION’S DEVELOPMENT

overview : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 2 overview Credit has been a part of human existence. credit has become an integral part of modern industrialization economies. The goals of credit receivables management must adapt to growing international markets credit and financial professionals must adapt to meet the challenges. Credit has been considered as the oil of the commerce

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 3 Cont… Credit was an aspect of the trading activity Credit contributed to the economic development. In the '70s, centralized credit managers were forced to learn how to manage people of different cultures Credit managers must become strategic partners in business operations.

Questions : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 4 Questions What is the importance of credit management for the economy and company’s development? Which one contributes more for the organization’s development that the credit managers to become strategic partners in business operations, playing prospective roles rather than being passive administrators reacting to the requirements of other business functions?

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 5 Cont… By realizing the importance of the credit managers for the wellbeing of the banks, why are they (credit managers) at the back office? Is it that the credit managers want at back office or banks managers are the one?

What is credit management? : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 6 What is credit management? Credit is defined as confidence in a borrower's ability and intention to repay. Credit management usually deal with the credit vetting of customers, the resolution of any invoice queries, allocations of payments, internal fund movements, and reconciliations and also maintaining relationships with customers.

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 7 Cont… Writing in the October 1993 issue of Business Credit, for example, John S. Gordon suggested the following goals. International credit should seek to: Minimize bad debt losses. Minimize accounts receivable outstanding. Maintain financial flexibility Review you’re banking arrangements. Optimize the mix of company assets

Cont.. : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 8 Cont.. Convert receivables to cash on a timely basis. Analyze customer credit risk. Be responsive to individual customer needs. Respect overall corporate financial constraints.

Strategic thinking of credit managers and organization’s development : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 9 Strategic thinking of credit managers and organization’s development No matter how much a commercial bank has evolved over time, however, making loans still remains its principle business on the asset side. The best credit managers get involved in decision making Marshall. “The better credit manager has the ability to communicate that the interest of sales and credit are more mutually aligned then previously perceived,”

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 10 Cont… Jon Lindsay, UK and Ireland managing director for Coface, agrees to get more strategic. “Credit management has been a back office function for a number of years, but as business is becoming more competitive, credit managers are having to be much more aware that they are not managing a back office risk function, but need to help use trade credit terms strategically.”

Credit-Based Economy A Must for China: CPPCC Members : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 11 Credit-Based Economy A Must for China: CPPCC Members "A credit system is a foundation stone for a modern market economy," said Wu Jinglian, China's socialist market economy is nothing, the country should speed up the pace of setting up a credit system, he noted. Two million residents in Shanghai to handle loan applications in a much shorter time, compared with the past.

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 12 Cont… "Credit Beijing," is also under official discussion, which aims to turn the national capital into a model town in this field and a paradise for investors. Credit China website Some local experts said that credit-based trade could help lower the cost of trading

Cont…. : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 13 Cont…. The setting-up of a credit servicing network for the public is imperative in China, said Wu. He suggested that the government first set up a commercial system to collect data on personal credit, in order to develop the credit service network. China's upcoming entry into the WTO means that the government will have to administer the market with international rules and that domestic companies, especially exporters, will have to protect themselves with credit management as a weapon, said Zhou.

Conclusion : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 14 Conclusion Credit management is undergoing process management to examine better ways to collect data, make decisions, and get paid faster. The future of credit looks exciting, demanding, and challenging.

Cont… : 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 15 Cont… Credit managers must become major players in the corporate planning function, learning to wear more hats, particularly in treasury, information management, and strategic planning. Most economist and analysts agree that the health state of corporate sector, along with the underlying robustness of the economy, have helped to keep the bank’s overall lending business stable. Credit play an important role for economic development, if.

Slide 16: 

WBB5043 CREDIT AND SYNDICATED LOANS MANAGEMENT PROF FAOZIAH IDRIS AMINA OMAR MOHAMUD 88024 16 THANK YOU Q & A

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