Our trade solutions facilitates local and cross-border activities to manage finance operations and liquidity, as well as mitigate risks inherent in trade.
Letters of Credit (Import & Export LCs)
Issued by the Bank at the request of the customer (applicant/importer) where the Bank promises to pay the beneficiary/exporter for goods and services.
- Payment is guaranteed by both the issuing bank and the confirming bank as long as compliant documents are presented.
- Mitigates the buyer/country risks
- Can allow multiple/continuous shipments and quality of products and price guaranteed by an independent pre-shipment inspection company
- Allows access to other products e.g. pre-shipment finance and structured finance
- Ensures delivery is done within schedule and payment
- Beneficiary presents all documents called for
- Meets all other terms and conditions set out in the LCs.
Facility for customers to purchase inputs for the production process of goods which are for onward sale/export.
- Helps to generate additional working capital to enable the client meet production demands
- Provides additional working capital with flexible security requirements
- Enables taking of very large orders
- Cheaper than other borrowing facilities
- Can be used on a revolving basis
- The facility and must be backed by an export LC or a confirmed export order.
Post import financing
A loan facility given to an importer (customer) to settle bills of exchange that have matured and the importer (customer) has not mobilized adequate resources to settle the same.
- The Bank allows its client an additional credit period which is un-disclosed to the seller and therefore allows to negotiate for better rates with the seller.
- Extended credit period.
- Lower lending rate (LIBOR plus a small margin).
- Used by importers to pay the LC Bills as they fall due instead of debiting the current account.
- It is ideal to use when Client account is not in credit balance as the fees charged are much lower that the O/D.
- The facility is usually granted for bills drawn under a Usance Letter of Credit.
KCB offer temporary loans to enable your business close out an order for supply of goods/ services from reputable companies.
- Finance of up to 70% of cost of items to be supplied
- Flexible security requirement
- Low interest rate
- Quick approval process
- Maximum period of 90 days depending on the term of the LPO
- Hold a KCB Corporate account
- In procession of LPO from the government, parastatal organization or reputable company.
- Proforma invoice or quotation of items of purchase from the supplier
Guarantees/Bonds - (Bid/Perfomance/Transit) bonds
A written irrevocable undertaking is issued by the bank to pay the beneficiary on demand if customer has not fulfilled contractual obligations.
- Last longer
- Client obtains credit hence easing increase in liquidity
- Immediate compensation in case of default
An exporter obtains an advance from the bank thereby securing liquidity. The advance is based on the face value of the trade bill/invoice.
- Immediate access to the proceeds of sales
- Simple operational procedures
- Cheaper additional working capital with simplified security requirements
Available to producers who do not have access to Balance Sheet Lending.
- Immediate access to the proceeds of sales.
- Simple operational procedures.
- Cheaper additional working capital with simplified security requirements.
- Producer obtains liquidity by leveraging his inventories well before the goods are sold onto the market.
- Pre-requisite is to have all risk insurance and an assignment of proceeds.
Documentary collections are used to facilitate importation/exportation of goods between parties and collection of sale proceeds.
- Cheaper than LC’s in terms of lower bank charges
- Easy to establish and operate with shorter processing time- speedy payments
- If documents are against acceptance (DA), allows an importer a period of credit and at the same time assuring exporter of payments
- Drawee has the flexibility on settlement of bills (especially for documents against acceptance)
- No impact on customer’s credit lines.
Structured Trade Finance (STF)
Is cross-border trade finance where the intention is to get repaid by the liquidation of a flow of commodities.
- Access to financing where no other financing is in place
- Financing facilities are tuned to the producers production and trade cycle
- Off balance sheet operation/liquidity
- Allows producer to benefit from his track record in a reduced risk environment
Seller obtains financing and receives immediate funds in exchange for a sales document not drawn under a letter of credit.
- Do not have to get a letter of credit.
- Improvement of liquidity. The product can convert forward receivables into cash on demand so as to accelerate capital turnover and relieve the pressure of finance.
- Simplification of financing process.