Sharing commercial risk
Description
Sharing commercial risk involves distributing potential financial losses or uncertainties among multiple parties—such as partners, investors, insurers, or suppliers—to reduce the burden on any single entity. This strategy enables organizations to undertake ventures that might otherwise be too risky, encourages innovation, and enhances resilience. By allocating risk through contracts, joint ventures, or insurance, it mitigates the impact of unforeseen events, stabilizes operations, and fosters collaborative problem-solving in volatile commercial environments.
Context
Conventional bank loans do not involve sharing of commercial risks, use of foreign direct and portfolio investment does. The introduction of equity-based instruments in lending to developing countries therefore offers new possibilities.
Broader
Value
Metadata
Database
Global strategies
Type
(D) Detailed strategies
Subject
Content quality
Yet to rate
Language
English
1A4N
J4840
DOCID
12048400
D7NID
209838
Editing link
Official link
Last update
Dec 3, 2024