Letter of Credit

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A Letter of Credit is a facility provided by the bank to its import customers to enable them import the goods and services from abroad without necessarily making payment in advance to the exporter.
Benefits

  • 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
  • Allows access to other products e.g. pre-shipment finance and structured finance
  • Quality of products and price guaranteed by an independent pre-shipment inspection company

Requirements

  • Import LC opening
  • A credit facility or cash margin
  • Declaration payment for imports form duly signed by the customer
  • Pro forma invoice from the seller or provider of services
  • Copy of Import Declaration Form (IDF)
  • Certificate of insurance or copy of marine insurance policy, if covered locally
  • LC application form duly signed
  • Documentary Collections/ Bills for collection

 

 

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