Defining a Framework to Assess Credit Profiles of Players in the Garment Exports Industry for a Leading Foreign Bank in India


The client was one of the leading foreign banks in India. The top management in India was in the process of reviewing its businesses, products and customer segments to identify new drivers of growth. As part of the initiatives, top management wished to examine the garment exports industry to determine the credit profile that included:

  • Definition of parameters for credit profile assessment
  • Development of benchmarks across select countries to ascertain the competitiveness of Indian companies across the parameters

UC was engaged to develop a framework for assessing credit profiles of companies.

Our Approach

To develop an assessment framework, UC adopted the following approach

  • Adopted a holistic approach beginning with landscaping of the garment exports industry. This included understanding the following:

    1) World trade statistics

    2) Scenario post MFA

    3) Country profiles and SWOTs for Turkey, Bangladesh, China, India

  • Key success factors were then outlined and each country was rated on them. China and India were then taken forward for a detailed comparison
  • Detailed comparisons involved an analysis of cost build-ups across various products for India and China. For e.g. based on the build-up, we understood that Chinese garments were cheaper by 20% as compared to Indian garments. This advantage was largely due to higher labor productivity, access to cheap capital and high quality raw materials
  • It was clear from our assessment that Indian companies had to reduce cost build-ups by 20%, increase labor productivity by 20% and also increase the pace of technology adoption
  • Exemplar performers were profiled from China, India and Turkey as case studies
  • The detailed assessment, profiles of exemplar performers and country competitiveness data was used as a basic framework for assessing credit profile of any ready-made garments company that approached the bank.


The client was provided with a comprehensive and granular credit profile that could be used within the garments export industry.