TRADE FINANCE

Bid Bonds

A guarantee by the bank that the bidder will execute the contract under the terms at which they bid in the event they win the tender.

Features & Benefits

• Unsecured up to KES 15,000,000.00 per customer.
• Maximum Tenor of 180 days.
• Easy to Fill application form
• 0.5% per quarter with a minimum of Kes.2,000.00
• No Negotiation Fee

Terms

• Collateral: Amounts above the unsecured limit to be secured by acceptable collateral as per bank policy

Fees & Charges

• As per tariff guide

Requirements

• Duly signed account opening forms and supporting KYC documents (for walk-in customers)
• Bidding/Tender documents
• Format of the guarantee
• Any other document that the bank may deem necessary

Performance Bonds

A banking facility that guarantees the borrower will abide and perform as per the terms of a specific contract.

Features & Benefits

• It assures payment to the employer in the event that the contractor fails to fulfill contract obligations, therefore helps to alleviate the cost of non-performance under the contract.
• It is an assurance of payment to the beneficiary (the contracting party) in the event that the applicant (the contractor who has signed a contract with the beneficiary) fails to perform fully under the contract.
• It is issued during the bidding process or award stage of a construction or procurement contract offering.

Terms

Collateral:

• Cash: 100% cash margin to be held in a lien account. The cash margin should be held in the same currency in which the guarantee is issued
• Other acceptable security as per bank policy. To be fully perfected before issuance of the guarantee

Fees & Charges

• As per tariff guide

Requirements

• Counter indemnity form
• Letter of award
• Format of the guarantee

Advance Payment Guarantee

A facility where a borrower asks for a sum of money to be paid in advance before commencement of works/service and in turn the employer requests for a guarantee before releasing the advance payment.

The employer is therefore guaranteed that the advanced funds will be repaid if default on work/service occurs.

Features & Benefits

• Is an instrument issued on behalf of a customer to secure upfront payments to them by third parties for contracts awarded to, but not yet executed by, the contractor
• It is an assurance that the contractor will use the proceeds to perform the contract.
• It is issued after the awarding of the contract by the contractor’s bank in favour of the contracting party.

Terms

Collateral:

• Cash – 100% cash margin to be held in a lien account. The cash margin should be held in the same currency in which the guarantee is issued
• Other acceptable security as per bank policy. To be fully perfected before issuance of the guarantee

Fees & Charges

• As per tariff guide

Requirements

Award letter

Security details

Application form duly filled and signed

Retention Bond

For some contracts/works, a specified percentage of the contract amount is held for a specific period to ensure performance as per the terms and conditions of the contract is met. The bank therefore can issue retention bonds for the same period to the employer to unlock the retained funds.

Features & Benefits

• Support a warranty to the purchasing/contracting party. An assurance of payment to the beneficiary in case of breach of contract mostly post contract execution.

Terms

Collateral:

• Cash – 100% cash margin to be held in a lien account. The cash margin should be held in the same currency in which the guarantee is issued
• Other acceptable security as per bank policy. To be fully perfected before issuance of the guarantee

Fees & Charges

• As per tariff guide

Requirements

• Executed contract documents
• Format of the guarantee
• Application form duly filled and signed

Customs Bond

Custom bonds or guarantees are used to guarantee that a specified obligation will be fulfilled between customs (Kenya Revenue Authority, KRA) and an importer for any given import transaction.

Guarantee payment of import duties and tax.

Features & Benefits

• VAT bonds issued to tax authorities for import/exports

Terms

Collateral:

• Cash – 100% cash margin to be held in a lien account. The cash margin should be held in the same currency in which the guarantee is issued

Fees & Charges

• As per tariff guide

Requirements

• KRA supporting documents
• Customs bond in the KRA format, duly executed by the customer
• Application form duly filled and signed

LPO/Contract Financing

Have you obtained purchase orders/letters to deliver goods and services or carry out contractual works? This is the product for you.

We provide funds to the borrower against confirmed orders or contracts to enable them perform contracts or meet the delivery of a specific order from the issuer.

Features & Benefits

Trade Loans are working capital solutions offered to bridge the gap between the period of making payment for materials and wages and the time of receipt of payment for goods and services supplied.

Terms

• Maximum Amount

60% of the LPO/Contract amount

• Collateral

All amounts to be secured by acceptable collateral as per bank policy

• Maximum Tenor

90 days. However, a longer period maybe approved on a case by case basis depending on the terms and conditions of the LPO/Contract

Fees & Charges

• As per tariff guide

Requirements

• LPO and contract documents
• Application form duly filled and signed

Invoice Discounting

Short-term financing that allows the borrower obtain funds in advance from the bank against accepted bills of exchange or commercial invoices. The advance is based on the face value of the accepted bill of exchange or the commercial invoice drawn by the seller where the payment will be deferred.

Features & Benefits

• Invoice discounting for confirmed invoices and deliveries.
• The Bank offers invoice discounting facility.
• Invoices must be from reputable organizations, blue chip & listed companies, Parastatals or Government.
• Financing up to 80%
• Pricing as follows;
  • Negotiation fee of 3%
  • Prevailing Interest Rate

Terms

• Unsecured Limit
• Where the buyer is on a pre-approved list of paymasters considered acceptable to the Bank, the unsecured limit shall be KES. 1,000,000.00

Maximum Amount

• 70% of the invoice amount

Collateral

• All amounts above the unsecured limit to be secured by acceptable collateral as per Bank policy

Maximum Tenor

• 90 days

Fees & Charges

• As per tariff guide

Requirements

• Unpaid Invoices (Received and verified by the buyer)
• Customer Application duly filled and signed

Pre-Shipment Financing

Short-term financing to facilitate performance under a sales contract and will often be predicated on the credit strength of the end buyer/ off-taker.

Features & Benefits

• This is the type of funding provided to the seller to commence production or sourcing of goods.
• The buyer may also be given funding to finance payment of deposit to the supplier.

Terms

Maximum Amount

• 70% of the invoice amount

Collateral

• All amounts to be secured by acceptable collateral as per the bank policy

Fees & Charges

• As per tariff guide

Requirements

• Executed term sheet
• Confirmed order (for first class customers) or payment guarantees/ letter of credit from the end buyer/off-taker
• Customer application duly signed

Post-Import Financing

Short-term financing to enable the borrower to meet their maturing/ payment obligations under import letters of credit, import documentary collections or open account.

Features & Benefits

This is a form of financing provided either to a seller if they have agreed on credit terms with the buyer, or to the buyer if it has granted credit terms to its customers or if it’s required to hold the stock for a period.

Terms

Collateral

• All amounts to be secured by acceptable collateral as per the bank policy.

Fees & Charges

• As per tariff guide

Requirements

• Executed term sheet
• Invoices and supporting documents (for first class customers) or payment guarantees / letter of credit from the end buyer
• Customer application duly signed

Warehouse Financing

A facility available to customers who are traders or manufacturers on the basis of goods or commodities held in trust as collateral for the loan.

Features & Benefits

This is a form of financing provided either to a seller if they have agreed on credit terms with the buyer, or to the buyer if it has granted credit terms to its customers or if it’s required to hold the stock for a period.

Terms

Collateral

• All amounts to be secured by acceptable collateral as per the bank policy

Maximum Amount

• 70% of the cost

Maximum Tenor

• 365 days

Fees & Charges

• As per tariff guide

Requirements

• Executed term sheet and supporting documents
• Customer application duly signed