Co-operative Bank has launched the Import Duty Finance to the Micro, Small & Medium-sized Enterprises (MSMEs) in Kenya. The product was launched to Co-operative Bank customers involved in the Import business.
Import Duty Finance (IDF) is a financing product for importers designed to help them to have a seamless process during clearing and transportation of imported cargo from the port of origin to the final destination.
The Import Duty Finance solution ensures prompt payment of duty and other related costs, ensuring timely delivery, as well as saving them from incurring high storage and demurrage charges.
The Bank also introduced Supply Chain Financing, a financing offer that facilitates suppliers who sell to buyers to obtain prompt payment once they submit their invoices. It provides short-term credit that optimizes working capital for both buyer and seller.
“To the buyer, it ensures a constant supply of goods and a good business relationship with suppliers; To the supplier, in addition to working capital they are able to extend financial credit to buyers by using approved invoices as a form of surety and reduce the debtors’ days,” says the bank in a press statement.
The Import Duty Financing and Supply Chain Financing are part of a bouquet of trade products custom made for MSMEs, specifically those in the import & export industry. The products include letters of credit, an undertaking by the bank on behalf of the importer to the exporter’s bank guaranteeing payment upon delivery and shipment of goods as per the agreed terms; did and tender bonds, an entry solution required for contracts and tenders, unsecured up to Ksh5million; performance guarantee and bond, upon tender award the bank issues a guarantee to the employer on the customers’ ability to perform and deliver on the contract and invoice discounting and LPO financing, the arrangement between buyer and bank to settle invoices and 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, these are business people who import 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 are also targeted. A customer can apply from as little as Ksh50,000 up to 100 percent of value of invoice or quotation raised by third parties such as Kenya Revenue Authority, clearing agent, freight company among others.