Management Consulting/ms-45


1. Explain in detail how the international financial architecture evolved over a period of time.
2. Explain Purchasing Power Parity (PPP) relationship and its applications. What are the reasons for deviations from such relationship?
3. Describe different types of foreign exchange exposures. Explain the techniques used for management of transaction exposure.
4. Explain in detail the Credit Insurance Policies and Maturity Factoring services offered by Export Credit Guarantee Corporation.
5. Discuss the basic steps involved in evaluating foreign projects. Why should a foreign project be evaluated individually as well as from its parent company's viewpoint?


I  will send  the balance  asap.

4. Explain in detail the Credit Insurance Policies and Maturity Factoring services offered by Export Credit Guarantee Corporation.

Explain in detail the Credit Insurance Policies  offered by Export Credit Guarantee Corporation.

Credit Insurance Policies

Shipments (Comprehensive Risks) Policy, commonly known as the Standard Policy, is the one ideally suited to cover risks in respect of goods exported on short-term credit, i.e. credit not exceeding 180 days. This policy covers both commercial and political risks from the date of shipment. It is issued to exporters whose anticipated export turnover for the next 12 months is more than Rs.50 lacs. (The

appropriate policy for exporters with an anticipated turnover of Rs.50 lacs or less is the Small Exporter's Policy, described separately).

What are the risks covered under the Standard Policy?

Under the Standard Policy, ECGC covers, from the date of shipment, the following risks:
a. Commercial Risks
   Insolvency of the buyer.
   Failure of the buyer to make the payment due within a specified period, normally four months from the due date.
   Buyer's failure to accept the goods, subject to certain conditions.
b. Political Risks
   Imposition of restriction by the Government of the buyer's country or any Government action, which may block or delay the transfer of payment made by the buyer.
   War, civil war, revolution or civil disturbances in the buyer's country. New import restrictions or cancellation of a valid import license in the buyer's country.
   Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which can not be recovered from the buyer.
   Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.

What does ECGC do?
•   Provides a range of credit risk insurance covers to exporters against loss in export of goods and services.
•   Offers Export Credit Insurance for Bankers and financial institutions to enable exporters to obtain better facilities from them.
•   Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan.
How does ECGC help exporters?
Offers insurance protection to exporters against payment risks
•   Provides guidance in export-related activities
•   Makes available information on different countries with its own credit ratings
•   Makes it easy to obtain export finance from banks/financial institutions
•   Assists exporters in recovering bad debts
•   Provides information on credit-worthiness of overseas buyers
Need for export credit insurance

Payments for exports are open to risks even at the best of times. The risks have assumed large proportions today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result. Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of payments for goods imported. In addition, the exporters have to face commercial risks of insolvency or protracted default of buyers. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. Export credit insurance is designed to protect exporters from the consequences of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss.
Cooperation agreement with MIGA (Multilateral Investment Guarantee Agency) an arm of World Bank. MIGA provides:
1.   Political insurance for foreign investment in developing countries.
2.   Technical assistance to improve investment climate.
3.   Dispute mediation service.
Under this agreement protection is available against political and economic risks such as transfer restriction, expropriation, war, terrorism and civil disturbances etc...

Explain in detail the  Maturity Factoring services offered by Export Credit Guarantee Corporation.

Maturity Factoring

Factoring is the purchase of accounts receivables. The supplier (exporter) assigns his accounts receivables in favour of the Factor and gives notice of assignment to the debtor. Factoring provides

   Financing, by way of pre-payment of the receivables;
   Sales ledger maintenance;
   Collection of receivables/recovery of bad debts and
   Credit protection against bad debts.


When pre-financing is provided but no credit protection is guaranteed by the Factor, (i.e. the client will be required to refund the amount pre-financed, together with interest thereon in the event of failure/insolvency of the debtor), it is called recourse factoring.
When no pre-financing of the receivables is done, but the Factor undertakes to pay the amount due only on maturity of the credit period, it is called maturity factoring.
ECGC has introduced non-recourse maturity export factoring.
What are the salient features of ECGC's Non-Recourse Maturity Export Factoring?
The Maturity Factoring scheme, as designed by ECGC has certain unique features and does not exactly fit into the conventional mould of maturity factoring. The changes devised are intended to give the clients the benefits of full factoring services through the Maturity Factoring scheme, thus effectively addressing the needs of exporters to avail of pre-finance (advance) on the receivables, for their working capital requirements. One important feature is the very important role and special benefits envisaged for banks under the scheme.

1   What are the specific services provided by ECGC under its Maturity Factoring?

  These are

      100% credit guarantee protection against bad debts;
   Sales register maintenance in respect of factored transactions;
   Regular monitoring of outstanding credits, facilitating collection of receivables on due date, recovery, at its own cost, of all recoverable bad debts.

  Payments would be received by the exporter, in his account, through normal banking channels. In the event of non-realisation of dues on factored export receivables. ECGC will promptly make the payment in Indian Rupees, of an equivalent amount, immediately upon the crystallisation of dues by the bank (exchange rate as on the date of crystallisation will apply).

2   How will the exporter get finance under the scheme?
  ECGC would facilitate easier availability of bank finance to its factoring clients, by rendering such advances to be an attractive proposition to banks. The Factoring Agreement that would be concluded by ECGC with its clients has an in-built provision incorporating an on-demand guarantee in favour of the bank without any additional payment or compliance or other requirements to be satisfied by the bank.

3   What are the specific benefits to the exporters under Maturity Factoring?
      Option to give easier credit terms to overseas customers - Better protection than an irrevocable letter of credit, without the need to insist on establishing one.
   Enables to offer more friendly delivery terms, like direct delivery to the customer (as against DP/DA) without any risk.
   Reduced foreign bank handling charges on documents.
   Substantial cost savings relating to monitoring and follow up (telephones, faxes, follow-up visits) of receivables, overdue bank interest on delayed collections and recovery expenses relating to bad debts.
   Increase in export sales, due to more competitive terms offered to customers.
   Better security than even Letters of Credit (as there is a possibility of refusal of payment in the latter on account of even minor discrepancies).
   Elimination of uncertainties relating to realisation of accounts receivables resulting in better cash management to meet working capital requirements.
   Full attention to procurement/production, marketing and sales and growth of business, due to freedom from chasing receivables.
4   What should the exporter do to avail of Maturity Factoring?
      Seek setting up of the facility by forwarding a formal application to the nearest office of ECGC, through the exporter's bank.
   Furnish full information with regard to business, including information on overseas customers, the bills in respect of whom are to be factored.
   Get pre-approval by ECGC for the purpose and have a 'Permitted Limit' (PL) established on each one of the overseas customers.
   Enter into a Factoring Agreement with ECGC and offer to ECGC for factoring (with payment of factoring charges) all future export transactions on DA/OD terms with those buyers on whom a PL has been established.
   Approach the exporter's bank for arranging advances on such factored receivables, and notify the name of the bank to ECGC to enable ECGC to communicate to the bank, the limit established on each customer.
   Ensure due performance of obligations to the buyer under export contract/purchase order.
5   What are the specific benefits to the banks, which advance money on ECGC-factored export receivables?
  For the banks, it would be a win-win situation all the way. Advances given against ECGC-factored export receivables could become the most preferred export advance portfolio for a bank, even better than the advances granted under an irrevocable letter of credit.   
      100% credit protection, free of cost.
   Prompt and immediate payment by ECGC of the full amount outstanding on the receivable to the bank, within 3 days of crystallisation of the dues, in the event of non-realisation of factored receivables on due date, without any protracted processing or scrutiny and without raising any queries.
   Savings on post-shipment guarantee premium to be paid to ECGC, if any.
   No pre-disbursal risk assessment or post-disbursal monitoring required. Full risk is on ECGC, with regard to repayment of the amount due (in rupees).
   Opportunity to build 'zero-risk assets', since the bank would not run any risk on the borrower, on the buyer or on his country.
   Banks could earn interest on a priority sector lending, without any of the attendant risks or hassles.
   Opportunity to satisfy additional working capital needs of the customer by sanctioning additional limits without enlarging the exposure risks.
6   How does ECGC ensure protection for the banks under Maturity Factoring?
      The bank would be furnished with a certified copy of the Factoring Agreement concluded between the client and ECGC.
   When a permitted limit is established by ECGC on an overseas customer in favour of an exporter-client, ECGC would directly communicate to the concerned bank branch all relevant details of the limit available to the exporter on that specified overseas customer, and would confirm in writing the obligations of ECGC to the bank, in respect of advances the bank may grant against such ECGC-factored export receivables and ECGC's commitment to the bank under the scheme for due repayment of the amounts.
7   What is the role expected of the banks under Maturity Factoring?   
      Encourage exporter-customers to explore the possibility of availing of the factoring facility from ECGC.
   Consider sanctioning of additional limits to exporters.
   Help ECGC to collect factoring charges on each of the factored invoices.
8   What are the fees and charges payable to ECGC by the exporter availing of factoring facilities?   
  The factoring application fee payable initially is Rs.10,000/-. For setting up permitted limits on each of his overseas customers, the exporter will have to pay a processing fee equal to 0.05% of the permitted limit sought subject to a minimum of Rs.2000. After this the factoring charges payable as and when an export bill is to be factored depends on the country to which the export is made and the credit period.    

5. Discuss the basic steps involved in evaluating foreign projects. Why should a foreign project be evaluated individually as well as from its parent company's viewpoint?
Project proposal grouping
(I)   All project proposals that met the administrative verification are directed to further evaluation procedure in order to be grouped according to areas within which they were submitted by the applicants.
(II)   Basic information on all project proposals within a certain scientific field the Foundation's Office shall forward to the appropriate Standing Committee.
(III)   Interdisciplinary project proposals shall be directed to a scientific field which the applicant numbered with 1 or 2. It is the task of the Standing Committee to ensure proper processing of interdisciplinary project proposals.
(IV) All proposals reported in the same scientific field the Standing Committee group into evaluation panel and determine the members of each panel. When grouping project proposals, Standing Committees should take into account the scientific fields within which the project proposals were submitted.
(IV)   In certain cases, Standing Committees or evaluation panels can transfer project proposal to the scientific field that the applicant did not choose for his project proposal. Such a decision must be explained in writing. The decision to transfer the project proposal to another scientific field and another evaluation panel is brought by the coordinator of the Standing Committee with the approval of the coordinator of the Standing Committee to which the proposal is transferred.
First evaluation step – short project proposal evaluation (I) In the first step, the evaluation panels evaluate short project proposals assigned to them, and then make a decision on directing project proposals to peer review. (II) Short project proposal evaluation is carried out electronically, according to predefined criteria and for short project proposals evaluation forms determined by the Board. Short project proposals evaluation forms are made available to applicants simultaneously with the Call release. (III) Decision to direct project proposals to the second step of evaluation shall be made at the meeting. If members of evaluation panel determine that the project proposal should be directed to the second round of evaluation (peer evaluation), they propose by reviewers and the project proposal is immediately sent to further procedure, and the applicant is notified. (IV) If evaluation panel members do not recommend sending the project proposal to the second evaluation step, they are required to explain in writing the reason why the proposal is not sent to further procedure. The decision on not sending the project proposals to further evaluation is made by the Board, and a notification on this, with panel explanation is sent to the applicant. 10 (V) For applicants whose project proposals did not meet the basic quality criteria during short project proposal evaluation, members of the evaluation panel may suggest a restriction on the ability to submit project proposal to the next Call. The final decision on the limitation of application is made by the Management Board.
Second evaluation step– peer review (I) For each project proposal directed peer review it is necessary to provide two reviews. Reviews are sent to applicants upon completion of the entire evaluation procedure. (II) Peer evaluation involves assessment of the full project proposal. If the reviewer, upon having examined the project proposal, estimates that he does not have the expertise to evaluate the project proposal, he should inform the Foundation as soon as possible and, if possible, recommend another expert who could evaluate this proposal. (III) Reviewers base their evaluation solely on documents that they received and they implement it in accordance with the procedures of the Foundation. (VI) Full project proposal evaluation is carried out according to predetermined criteria through evaluating forms determined by the Board. Full project proposal evaluation forms are made available to applicants simultaneously with the Call release. (IV) Reviewers have no possibility of communicating and exchanging information.
Evaluation panels – final evaluation (I) Upon peer review completion the evaluation panel members read all reviews, assess project proposals' financial plans, and discuss ethical issues and, if necessary, additional criteria determine by the Board for particular Calls. (II) When evaluating financial plan, evaluation panel members must assess whether all of the items that the applicant proposes are purposeful, absolutely necessary and justified by the actual needs of the project and whether the financial amount are appropriate for each item according to the project proposal work plan. (III) Following the evaluation, the evaluation panels to determine whether the project proposal complies with the determined criteria, and decide whether to recommend it for funding. Project proposals that the panel determines that have met the criteria and receive a recommendation for funding must be ranked. 11
3.8. Standing Committees – recommendation for funding (I) Upon receiving evaluation results and recommendation of evaluation panels, Standing Committees make recommendations for funding. (II) Panel coordinators (or other members), that will explain the recommendations for funding, can attend the meeting of the Standing Committee. (III) When making recommendations for funding, Standing Committees should take into account the implementation of the evaluation procedure, evaluation results, the availability of financial resources and the balance of the development of scientific fields and branches within a scientific area. (IV) Standing Committees cannot change the order of projects in the rankings, which are determined by the evaluation panels, but may require additional explanation from the panels. (V) If Standing Committees, in their recommendations, differ from the ranking established by the panel for evaluation, the difference must be explained in writing. (VI) Standing Committees are required to notify the Board if there is a suspicion that the evaluation procedure is not conducted in accordance with the rules of the Foundation. 3.9. Decision on funding (I) Based on evaluation results and recommendations of Standing Committees, the Foundation's Board decides on project proposal funding. The Board may decide not to conduct the two-stage evaluation procedure as described above. In the event of any such decisions, the Board shall prescribe the evaluation procedure and publish it the on the date of releasing the call, at the latest. 12 3.10. Graphic representation of the evaluation procedure Picture 1. Graphic representation of evaluation procedure 4. EVALUATION CRITERIA (I) Project proposal evaluation criteria within a certain Call are determined by the Board. The evaluation criteria shall be adjusted individually to each Call in order to reflect the purpose and goals of the programme. (II) All criteria that shall be applied in the evaluation must be made available to applicants simultaneously with the Call release. Call release Receiving project proposals Administrati ve verification of project proposlas Grouping of project proposals Short project proposal evaluation Directing to peer review Peer review of the full project proposal Final and financial evaluation and ethical issues assessment Funding decisions Funding decisions Rejection Rejection Rejection 13 (III) General criteria for evaluating project proposals are scientific quality, relevance and research feasibility, applicant quality and research environment. Scientific quality and research relevance: • scientific foundation of the project proposal and quality of the research plan • the importance of the proposed topic in relation to the whole area of research • potential of the project proposals to improve research area • competitiveness of the project proposal in relation to the existing research on the same subject • suitability and competitiveness of the proposed methodology (as compared to the best in the area) Project proposal feasibility: • clarity and realism of the objectives and good planning of activities that lead to the achievement of objectives • realism and feasibility of the research (with respect to the planned time, objectives, intended results and resources available) • identifying risks and finding adequate solutions • assessment of the planned capacity for the execution of the project (financial support, number and competence of team members, institutional support) Applicant and research environment quality: • scientific competence of the applicant (estimated based on previous accomplishments) • applicant's competence for project management • Previous research contributions of the applicant and team members in the proposed area • Institutional support (providing adequate infrastructure and other conditions necessary for the implementation of the project) (IV) The Foundation will not fund research that is contrary to fundamental ethical principles, research ethics and the code of ethics of scientific research. Therefore, the members of the evaluation panel are required to consider whether the proposal involves any ethical issues and whether they are properly addressed (in accordance with legal provisions and international regulations). Members of the evaluation panel are required to establish the existence of ethical dilemmas, and all other matters that may pose potential risk (e.g. safety issues, hazards, possible misuse of the results in relation to humans, animals or the environment). (V) In addition to the above mentioned general criteria, the Board may prescribe additional criteria for project proposal evaluation. All criteria that will apply in the evaluation must be made available to applicants simultaneously with the Call release. 14 5.
CRITERIA FOR SELECTION OF EVALUATION PANELS' MEMBERS AND REVIEWERS (I) Members of evaluation panel and reviewers should be selected so that the best match between their areas of expertise and topics of the project proposal are looked for. (II) The criteria for their selection may vary depending on the type of programme and the type of evaluation, and special attention should be paid to the selection of panels and reviewers for evaluating interdisciplinary project proposals. (III) The main criterion for selection of panel members and reviewers are appropriate competencies for assessing project proposals (determined on the basis of current scientific research and achievements) and competence in the area of programme within which the Call was announced and independence (absence of conflict of interest) (IV) Scientific competence is crucial in selecting reviewers. However, in the selection of evaluation panel it is not necessary that a person is an expert in every single subject, but that the members of the panel as a group have the necessary competencies for evaluating the assigned proposals. (V) Reviewer must have equal or greater competence in relation to the applicant whose project proposal he evaluates. (VI) Peer review must be international. In certain cases, project proposals from humanities, one review can be Croatian when there is a valid reason. (VII) The main criteria for selection of Croatian and international reviewers who will conduct the evaluation are: • PhD degree or other proven professional competence related to the topic of the project proposal • appropriate competencies for assessing project proposals (estimated on the basis of current scientific research and achievements) - reviewers should be experts in the topics of the project proposal • competence in the area of the programme within which the Call was released • independence (absence of conflict of interest) • Excellent knowledge of English language 15 6.
CODE OF CONDUCT FOR PERSONS INVOLVED IN THE EVALUATION PROCEDURE (I) All persons involved in the evaluation procedure conducted by the Foundation must respect the principles of confidentiality, integrity, impartiality and independence. It is expected that the tasks entrusted to them are completed responsibly, respecting the highest ethical and professional standards of their profession, not constituting or representing the interests of the institution where they are employed, nor any other organisation. (II) All persons involved in the evaluation procedure should equally treat all project proposals, regardless of gender, age, ethnicity, nationality or social origin, religious beliefs, sexual orientation, language, disability, political opinion, social or economic conditions of applicants. (III) All persons who are in any way involved in the evaluation procedure the Foundation obliges to respect the confidentiality of the information they come into contact (IV) The members of Standing Committees, members of evaluation panels and reviewers are not allowed to discuss projects with third parties, nor discuss with other participants in the evaluation procedure, except during the formal discussion at committee meetings. (V) Members of Standing Committees, members of evaluation panels and reviewers should not publicly disclose the identity of the panel members and reviewers. (VI) Members of Standing Committees, members of evaluation panels and reviewers must not communicate directly with applicants (project leaders or co-workers). (VII) In case that any participant in the evaluation directly or indirectly associated with one or more project proposals or in relation to them has any other interest that could affect the neutrality of the evaluation, he shall report such facts as soon as he becomes aware of them. (VIII) Ratings and comments entered into evaluation forms by reviewers are basic feedback to applicants. It is therefore of the utmost importance that the reviewers take into account the manner and style of comment writing that should primarily be substantive, quality, specific, purposeful, targeted and polite (IX) Comments should be formulated in the form of statements and / or an explanation of the advantages and disadvantages of the project proposal. All  comments will be submitted to the applicant unchanged. (X) When writing comments, members of the evaluation panels and reviewers should adhere to the following guidelines: • Use clear, analytical and unambiguous comments • Use grammatically correct and complete sentences, no jargon 16 • Avoid highlighting insufficient knowledge of the project area that is being evaluated or no confidence in the project • Do not refer to the age of the applicant, its nationality, gender, or anything that is related to the private life of applicant • Avoid describing, i.e. retelling parts of the project • Avoid any expression of disrespect to the applicant / project leader, his profession or field of science that deals with the proposed project.
1. Planning an Evaluation at the Design Stage
Independent Project Evaluations are required for all projects.
Depending on the evaluation purpose, Independent Project Evaluations are undertaken at mid-term of the project (mid-term evaluations) and/or shortly before the end of the project (final evaluations). Projects lasting four years or more must undergo a mid-term evaluation and a final evaluation.
Mid-term evaluations aim at improving future performance of the project. While final evaluations aim at determining the extent to which objectives were achieved and at contributing to future programming, policy making and overall organizational learning.
Bearing in mind that the evaluation provide information in a timely manner, so that it becomes available when the programme or project needs it most, the Project Manager should determine a schedule for when to carry out a mid-term or final Independent Project Evaluation in order to plan in advance when the evaluation process should start and end.
a) Evaluation Criteria and plan
Criteria for Independent Project Evaluations
Guidelines for Cluster Evaluations
Evaluation Criteria Definitions and Sample Questions
Evaluation Plan Template
Evaluation Quality Criteria Checklist - Design of Projects and Country, Regional and Thematic Programmes
In-depth Evaluation Approach Paper
b) Human Rights and Gender Equality
Mainstreaming Human Rights and Gender Equality
c) Roles and Responsibilities
Evaluation Roles and Responsibilities in Independent Project Evaluations

2. Approving Process  
Submitting offices must undertake consultations with IEU for all projects and programmes (and revisions to the same)  to be approved either by the PRC or by Field Representatives.

3. Managing an Evaluation
Independent Project Evaluations are initiated and managed by Project Managers, and conducted by independent external evaluators. Project Managers assume the day-to-day responsibility for managing the evaluation, including its funding, and serve as a central person connecting evaluation stakeholders. They also ensure compliance with UNODC Evaluation Policy and Guidelines.
Where available, the Planning, Monitoring and Evaluation Focal Point, serves as facilitator to the Project Manager throughout the evaluation process.
Independent Project Evaluations need to be initiated 4 to 6 months in advance, depending on the size of the project. Evaluations are to be completed during the life span of the project to ensure appropriate evaluation capacity and to avoid project extensions.
a) Terms of Reference (ToR)
Guidelines for Evaluation ToR
Template for Evaluation ToR
b) Selection of evaluators
Guidelines for Selection of Evaluators
Evaluation Consultants Declaration of Interest
4. Undertaking an Evaluation
The Project Manager is responsible for the provision of desk review materials to the evaluation team, reviewing the evaluation methodology, liaising with the Core Learning Partners, as well as reviewing the draft report and developing an implementation plan for the evaluation recommendations.
The Project Manager is further in charge of providing logistical support to the evaluation team including arranging the field missions of the evaluation team. For the field missions, the evaluation team liaises with the UNODC Regional/Field Offices and mentors as appropriate.
a) Roles and Responsibilities
Evaluation Roles and Responsibilities in Independent Project Evaluations
b) Guidelines and Templates
Guidelines for Inception Report; Template for Inception Report
Guidelines for Evaluation Reports,  Template Report, Typographic Styles, UN Spelling
Quality Assessment for Independent Project Evaluation Reports

When drafting the evaluation report, the mandatory Guidelines for Evaluation Reports and the Template Report must be consulted and used.   
The Template Report is used by writing the new text on top of the text laid out in the word file to adopt the correct format and style. Please remember to download the word file of the Template Report and save locally before using it.
5. Using the Evaluation
Appropriate evaluation follow-up mechanisms are required in order to ensure that evaluation recommendations are properly utilized and implemented in a timely fashion, and that UNODC future activities take into account the results of previous evaluations.
Once the evaluation report has been finalized and disseminated, the Project Manager is responsible for filling in the Evaluation Follow-up Plan (EFP) templateone month after issuance of the final evaluation report. In the EFP, the Project Manager summarizes when, how and by whom the recommendations made in the report will be implemented.
The Project Manager updates the EFP regularly and provides to IEU.

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Leo Lingham


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