Trade Finance
The Bank’s strategic intent to be labeled as The Trade Bank, which is reinforced by our presence in over 20 countries in Africa, makes us a trustworthy partner for all your Cross Border Trade businesses especially those along the Francophone West African Corridor or WAEMU region and the Moroccan Corridor. This, coupled with our deep knowledge and understanding of the nature of business of our customers, positions us as the Trade Bank of choice.
We offer trade services such as:
- Letter of Credit (LC)
- Advanced Payment
- Avalised Bills/ Discounting of Avalised Bills
- Export Financing
- Foreign Transfers
- Documentary Bills for Collection
- Syndicated Loans
- Cross Border Trade
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Product Details
An instrument issued to a buyer/contractor by an acceptable third party (a bank) guaranteeing that the buyer/contractor will comply with its obligations under the contract. If he/she fails to do so, the bank will be liable for the said amount.
Bid/Tender Guarantee (bond)
Performance Guarantee (bond)
Advance Payment Guarantee
Payment Guarantee
Retention Guarantee
Standby Letter of Credit
Bid/Tender Guarantee
A bond issued by the bank on behalf of a customer to aid the bidding for a contract. This essentially guarantees that the customer will not pull out of the bidding process.
Benefits
Enables the customer tender for more bids.
Performance Guarantee
An undertaking required by the contract employer or a principal from a contractor as security for their performance. The bond usually states that the contractor has the ability to carry out the job. This is normally issued to cover the duration of the contract.
Benefits
Validates the contract awarded to the contractor.
Advance Payment Guarantee
This is a guarantee issued to enable contractors collect mobilization fees for contracts won. Here the bank becomes liable if after collection of the money, the contractor still fails to execute the project.
Benefits
Enables the customer to make necessary preparations for initial start-up of project.
Bank Payment Guarantee
This is an undertaking or an agreement where the bank agrees to be liable for the debt of a customer to a third party or beneficiary on default.
Benefits
Boosts the customer’s turnover
Relief of working capital.
Retention Guarantee
An undertaking by the bank to the Contract Employer, which enables the contractor (the Bank’s client) collect the funds that ordinarily would have been withheld by the Contract Employer for a specified period to take care of any flaws/defects on the project/contract executed
Benefits
Avails the contractor with the required 10% retention so as to move on to other projects.
Avails the contractor with working capital earlier than expected
Standby Letter of Credit
This is a type of guarantee that supports a customer’s obligation under a contract. In the event that the customer fails to comply under the agreed contract on the StandBy LC, the Bank pays the Beneficiary upon compliance with the terms of the LC.
Facility Details
Letter of credit is an agreement between the buyer/importer and the seller/exporter that when the buyer receives the goods will be able to remit the funds to the seller. This form of payment is used to give protection to exporters/seller and importers/importer against buyer/sellers risk and country risk.
Revocable, Irrevocable, Back to back, Transferable, Confirmed, Unconfirmed, Revolving, Green clause Red Clause
Revocable
This is a type of L/C whereby the buyer/importer or the seller/exporter can cancel it without the consent of the other.
Irrevocable
This type of L/C neither the buyer/importer nor the seller/exporter can cancel it without the consent of the other
Back to Back
This is a type of L/C whereby two letters of credit are issued one backing the other e.g. if the manufacturer resides in Europe and the importer in Tanzania and wants to import from Europe, having opened one L/C, the importer can import for a certain period with the same, without opening a different L/Cs.
Transferable Letter of Credit
An L/C which can be transferred to many beneficiaries depending on the original L/C. e.g. customer A applies for an L/C IFO customer B; customer B is unable to supply the goods so he can transfer the original L/C to customer C so that the goods can be supplied and transported to customer A. The payments can be made into two different beneficiaries.
Confirmed
An L/C whereby the correspondent bank of the issuing bank adds a confirmation on the L/C meaning that they put more weight on it to help the exporter to have more confidence on the importer.
Confirmation can be done locally from local banks or internationally from correspondent banks.
Unconfirmed
A type of L/C whereby none of the issuing banks, correspondent or local bank, has committed itself to the instrument.
Revolving
A type of L/C whereby, depending on the terms and conditions, the amount is revived without requiring specific amendments.
Green clause
A type of L/C whereby the exporter is financed to enable him to collect the goods, insure and put them in a warehouse. The bank is provided with the warehouse receipt.
Red clause
An L/C is given to the exporter relying on the documents provided by him. The finance is given on the pre-shipment stage.
Security
Cash or collateral
Benefits
Gives protection to importing customers
Enables the customer to outsource a variety of suppliers for different goods