Credit derivatives are securities that offer protection against credit risk. The credit derivatives market is growing rapidly as credit deriva-tives have gained widespread use. The paper describes the characteristics of credit derivatives. The contribution of credit derivatives in risk sharing in emerging markets is also examined. The problem of this research is making quality investment decisions of institutional
credit risk in developing markets. The aim of this paper is to provide a scientific explanation and description of the process of monitoring and managing credit risk and the characteristics of credit transfer. In addition, the paper defines a model that will serve to reduce risk exposure while respecting the specifics of business and management in emerging markets.