Co-Operative Bank Launches Import Finance Product as well as other range of trade finance products for MSME’s
The product targets Cooperative Bank customers who are involved in the Import business. Key features of The Import Duty Finance (IDF) program are that it is aimed at financing product for importers. It is also further designed to help importers endure a stress free process during the clearing and transportation of imported cargo from the point of origin to the final destination.
The main advantage of the Import Duty Finance program is that it will ensure prompt payment of duties and other freight charges as it unlocks working capital for the customer while also ensuring timely delivery, as well as saving them from incurring high storage and demurrage charges.
In another similar developing story, the Cooperative Bank also introduced Supply Chain Financing program. According to the Bank, the program is aimed at financing suppliers who sell to buyers. The program’s advantage is that suppliers would be able to obtain prompt payment once they submit their invoices to the Bank.
The bank lauded the project as one of its kind stating that it would provide a short-term credit facility which will optimize working capital for both the buyers and sellers. On the part of the buyer, the funding will ensures a constant supply of goods and a good business relationship with suppliers whereas on part of the supplier in would provide a working capital.
Speaking at the launch of the Import Duty Finance product Moses Gitau, Cooperative Bank Head of Business Banking, said:
“In the last 2 years, the Bank expended a lot of resources on customer engagements and research work to understand the dynamics of this critical business segment and tailor made the MSME package to make it more responsive to the needs of MSMEs. In the one year we have been rolling our revamped MSME offering to our customers and the public in general, the results have been positive. This year, we are now refining the product to target specific groups of MSMEs such as the import and export industry.”
The Import Duty Financing and Supply Chain Financing are an integral part of a bouquet of trade products custom made for MSMEs. These other trade products are specifically tailored for customers in the import & export industry.
The other products include:
(a)Letters of Credit which is an undertaking by the bank on behalf of the importer to the exporter’s bank guaranteeing payment upon delivery & shipment of goods as per the agreed terms
(b) Bid and Tender Bonds which is an entry solution required for contracts & tenders, unsecured up to Ksh 5 million
(c) Performance Guarantee and Bond which upon a tender award the bank issues a guarantee to the employer on the customers’ ability to perform and deliver on the contract and Invoice
(d) Discounting & LPO Financing which facilitates for the arrangement between buyer and bank to settle invoices & LPO and payment done directly to the bank.
The trade finance products are targeted at importers of motor vehicles and equipment; importers of second hand items for sale; importers of second hand goods for resale including business people in Gikomba and other markets; Importers of other goods such as manufacturers (raw materials); construction materials suppliers or other businesses etc; Clearing and logistics firms who handle clearing and forwarding services as well as logistical solutions.
A customer can apply from as little as Ksh. 50,000/- up to 100% of value of invoice or quotation raised by third parties such as KRA, clearing agent, freight company among others. The Bank continues to look for more opportunities and develop various solutions to build on its vision for MSMEs, which is to grow world class entrepreneurs beyond the Kenyan borders.