Trade Finance Solutions for SMEs & Corporates

Trade Finance Solutions

Trade Finance is the facilitation and financing of trade activities between parties both internationally and locally. We meet your business needs throughout the trading chain with personalised solutions.

Sourcing and Supply Stage (Non-funded)

Guarantees

Bonds

Letters of Credit

Documentary Collection

Bills Avalisation

Financing Stage (Funded)

LPO, LSO & Contract Financing

Pre-Shipment And Post-Shipment Financing

Invoice Discounting

Import and Export Loans

Inventory/Stock Financing

Insurance Guarantees

Structured Trade Solutions

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Guarantees

A Bank Guarantee is a unilateral contract between the bank as a guarantor and the customer as a warrantee, in which the bank undertakes to make payment to a specified beneficiary within limits of a stated sum of money in the event the customer/warrantee fails to perform an obligation.

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Bonds

A bond (also known as an insurance guarantee ) is a unilateral contract in which the guarantor undertakes to make a payment to a specified beneficiary within certain limits of a stated sum of money when the third party (contractor/supplier) fails to perform an obligation as per the terms of the contract. The bank in this case becomes the guarantor.

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Letters of Credit

A Letter of Credit (LC) facility is availed to buyers and/or importers and offers you secure payment terms to your suppliers and/or exporters abroad. The terms simultaneously ensure the prompt delivery of your goods and services and in the condition expressed. Once the contract and/or delivery has been fulfilled as required, payment is then released to the supplier/exporter. The LC can be local or international.

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Documentary Collection

This is a method of payment that allows Credit Bank to handle import or export documents (Financial or Commercial documents) in accordance with instructions issued and received. Documentary Collection is a transaction whereby the exporter entrusts the collection of payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank (importer’s bank), along with instructions for payment. That is, the documents will be delivered either against payment, against acceptance or on other terms and conditions as agreed between buyer (importer) and seller (exporter).

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Bills Avalisation

This is undertaking by Credit Bank on behalf of the importer, to honour, payments of Bills of Exchange or drafts from the supplier. This undertaking is similar to that of a Letter of Credit and hence provides the same comfort to the supplier but with an easier structure for the importer. This is applicable to both domestic and international trade.

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LPO, LSO & Contract Financing

Simply referred to as LPO Financing, this financing gives your business much needed working capital based on the reputation of both your business and the organisation you are supplying goods and services to

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Pre-Shipment And Post-Shipment Financing

Also referred to as Pre-Export Finance, is issued when your supplier (the seller) wants the payment of the goods before shipment. The main objectives are to enable you (the exporter) to:

Procure raw materials
Carry out the manufacturing process
Provide a secure warehouse for goods and raw materials
Process and pack the goods
Ship the goods to the buyers
Meet other financial cost of the business

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Invoice Discounting

Sometimes your business manages to complete an order for its client way ahead of schedule. At other times, your client may have a credit policy of say 60 days. This presents liquidity challenges for especially for small and medium sized enterprises.

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Import and Export Loans

Import Loan

Liquidity challenges are a part of small and medium sized business operations. Import Loans allows you access to short-term cash in advance to enable you (the importer) to meet your immediate payment obligations. Under such arrangements, Credit Bank finances your import commitments by making payment against the Letter of Credit or Documentary Collections and we then receive that payment from you at a predetermined date in the future.

Export Loan

If you are in the export business, liquidity challenges may arise from time to time. At Credit Bank, we provide you (the exporter/seller) with access to working capital finance in the form of an Export Loan prior to shipment or delivery of goods. A facility can also be provided against evidence of shipment of goods or supplies made to the importer.

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Inventory/Stock Financing

Your business can be able to raise additional working capital using stock/inventory. Credit Bank avails this financing to businesses with the aim of assisting you to increase sales volume and capitalize on other expansion opportunities.

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Insurance Guarantees

A guarantee is a unilateral contract in which the guarantor undertakes to make a payment to a specified beneficiary within certain limits of a stated sum of money when the third party (contractor / supplier) fails to perform an obligation as per the terms of the contract. The Insurance Agency in this case becomes the guarantor

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Structured Trade Solutions

Not all solutions we give as Credit Bank can fit your business’ needs. That’s why when you come to us, we take the time to understand your business’ needs and offer you tailormade solutions. These provide you with credit enhancement structures through which capital solutions are provided outside the traditional fall back on securities.

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The Trade Finance Journey for Your Business

Sourcing

Assuring Your Credibility and Capacity

Financing the Job

The International Play

Mitigating the Risks

Get Paid

Sourcing

Let’s have a scenario where you are a supplier of goods and services. You meet up with Business A, John Doe Enterprises and Business B, Jane Doe Enterprises. They’ve just advertised a tender looking for suppliers to supply them with Goods A and B respectively. This process of looking for suppliers is normally referred to as sourcing through tendering or bidding.

Assuring Your Credibility and Capacity

What these two businesses need is an assurance of your credibility and capability to deliver the required goods and/or services. As our customer, we can help you with that. We issue an undertaking to pay Business A/B a specific amount in the event the you have not fulfilled contractual obligations.

Financing the Job

So, after presenting the necessary documents, you are deemed qualified and you win the job to supply the goods. But Eh! You don’t have money! Relax, no need for tension! Credit Bank to the rescue with various financing options:

The International Play

So, Goods A that John Doe Enterprises wanted, are available locally. This is easy, just organise the payment and deliver the goods. Goods B, that are available only in the international market, are a whole different story. There’s a whole set of risks involved with sourcing your goods from the international market. Questions abound like, “if I pay the guy on the other end first, will the guy deliver? If the guy delivers, will the goods be up to spec?”

Mitigating the Risks

Well, risk mitigation is part of our day to day activities at Credit Bank. What you need to get Goods B from your international supplier is a go-between that can be trusted. The solutions we provide as a go-between put your mind at ease! Basically, we give your supplier special documents that assure payment if and when the goods they are to supply arrive in order. If everything is in order we release the funds to your supplier.

Get Paid

Finally, you’ve gotten the goods. You can supply them to John Doe Enterprises and/or Jane Doe Enterprises… with some neat profits in between for yourself.

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Trade Finance in Kenya

THE PERFECT
FINANCING & FACILITATING PARTNER
FOR YOUR LOCAL TRADE