Working Capital Facilities

Overdraft

  • Facilities offered to customers to meet their working capital requirements.
  • Usually offered for up to 12 months.
  • Interest is charged on the daily outstanding balance, hence allowing the customer some flexibility to manage finance costs for a trading business.  
Commodity Financing

Collateral Management Agreement (CMA) Structures.

  • Facilities offered for commodity trading customers associated with large volumes
  • The commodities include maize, tobacco, fuel, etc.
  • The commodity becomes the security for the facility.
  • These facilities enable the customer to acquire higher volumes of the commodity for trading and in turn increases their revenue and profit
Trade Financing

Letters of Credit

  • These are facilities offered to international traders.
  • The Bank undertakes to pay on instruction from the Buyer, a certain amount to the Seller.
  • The facilities are carried out within a prescribed period and against surrender of stipulated documents covering the shipment of goods contracted between Seller and Buyer.
  • The structure substitutes the customers credit worthiness with the creditworthiness of the Bank, hence protecting the interests of both the Importer and the Exporter.    
Guarantees
  • The Bank makes an undertaking to make a payment to a third party if the customer fails to fulfil a specific obligation.
  • The guarantee letter acts as financial security for the beneficiary and enables the customer to access merchandise or services on credit, thereby, assisting in managing the customers liquidity.
Pre-shipment Financing
  • Loans or advances to exporting customers to cover their working capital requirements including procurement of raw materials, labour, packing costs and other pre-shipment expenses to allow the exporter to fulfil delivery to their buyers.
Post-shipment Financing
  • Financing provided to an exporting customers against shipment that has already been made. This finance is granted from the date of extending the credit after shipment of the goods to the realization date of the Sellers proceeds.
Term loans

Capital Expenditure Facility

  • Financing provided to the customer for projects of a capital nature and repaid over an extended period in regular instalments.
  • This type of financing is offered to the customer to acquire, upgrade or maintain long-term assets like property, plants, buildings, technology or equipment often for new projects or investments.
  • The facilities have long tenures stretching to periods as long as 5 to 10 years in line with the long-term nature of the projects financed.
Vehicle and Asset Financing (VAF)
  • These are facilities offered to customers requiring the necessary capital to purchase new assets or refinance existing assets.
  • Variations include
  • Financial Leases
  • Operating Leases
  • Residual value Leases
  • Back-to-back Leases
  • Lease back
  • The major advantage is that lease payments are tax deductible, thereby allowing the customer to save on costs.
  • VAFs also assists customers to hedge against inflation and facilitate planned replacement of capital assets with minimal cash outflow.
Bankers Acceptance (BA)
  • The Bank accepts BAs from customers. This gives security enhancement to the holder of the instrument as the Bank guarantees payment.
  • The significant advantage to the customer is that interest rates are generally lower than what is charged on the other forms of loans due to the tradeable nature of BAs.

Loan Requirements

Full customer KYC

Loan application letter stating facility required, amount and proposed tenure. Company financials for the past 3 years (or from inception if the company is new) and the latest management accounts (past 6 months) Other information which might be required will be communicated to the customer.