Credit Bank on Trade Finance Solutions in Kenya Today

By Virginia Nyambura

Trade finance simply refers to the solutions that facilitate business transactions. This facilitation is done by the bank/financial institutions like Credit Bank.

Finance of trade can be facilitated by banks and financial institutions tailored for that specific purpose like Credit Bank.

Credit Bank has managed to established a strong brand name and own space in the trade finance industry. The bank engages innovative tools to offer notch high products and services.  It understands the business environment and fills the gap for tailored financial products and services. The bank was recognized as the Best Bank in Trade Finance under a special category during the Think Business Banking awards in 2017.

Credit bank’s financial products enable its customers to tender, perform contracts, expand business activity and provide working capital for import and export, asset acquisition, project financing transactions including support on logistics.

The bank offers solutions to finance local purchase orders or contracts that involve the supply or delivery of products to approved counterparts. This enables the client to meet your working capital requirements & fulfill contractual obligations

This could be done through contract financing, local purchase order (LPO) financing, and Local Service Order (LSO) financing.

Bank guarantee refers to a unilateral contract between the bank as a guarantor to the beneficiary; the bank undertakes to make payment to a specified beneficiary, within limits of a stated sum of money, in the event the customer fails to perform an obligation.

Credit bank offers a variety of Bank Guarantees including Tender/Bid Bonds, Performance bonds, Advance payment Guarantees, Retention Bonds, Shipping Guarantees, Customs Bonds, Transit Bonds, Security Bonds, Credit Guarantees, Immigration Bonds, Facility Guarantee and Check Payment Guarantee.

The bank assures its clients of its capacity to issue other forms of guarantee depending on the requirements of its customers.

Credit Bank issues a Letter of Credit (LC) on behalf of a customer (buyer/ importer), assuring a seller of payment, on condition that the specified complying documents are presented to the Bank.

The documents prove that the seller has performed the obligations under an underlying contract, for example, a sale of goods contract and that the goods have been supplied as agreed. In return for these documents, the seller receives payment from the Bank that issued the LC.

Credit Bank offers both pre-shipment and post-shipment credit facilities both locally and in foreign currency.

Pre-shipment Financing is normally issued when the seller wants the payment of the goods before shipment. This enables the exporter who is the customer 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 and meet other financial costs of the business.

Post Shipment Financing is also provided to a seller after evidence is provided that a shipment has already been made.

Documentary Collection, a product offered by credit bank, is a transaction where the exporter entrusts the collection of payment to the remitting bank being the exporter’s bank, which sends documents to a collecting bank which is the importer’s bank, together with instructions of payment. The documents get delivered either against payment, against acceptance or on other terms and conditions as agreed between buyer and seller.

Export loans and import loans are also included in the products offered by the bank. Import loans enable access to more financial resources to clear goods from the port, manufacture, and store or arrange for final sale to the end buyer. Export loans, on the other hand, Improve a business’s liquidity as the trader get paid for export bills before they are due for payment.

Credit Bank offers Structured Trade Finance which has tailor-made solutions that provide customers with credit enhancement structures through which capital solutions are provided outside the traditional securities hence assuring its customers of quality well-tailored solutions to their trade.