The bank creatively seeks to address financing gaps in the flow of goods and services between different actors in the various trade and related value chains. Our products are designed to meet the unique needs of our clients.

Products Available

  1. Trade services (Import/export letters of credit, bank guarantees and bills on collection)
  2. Short term Loans
  3. Structured trade and commodity finance

1. Trade Services:

  1. Letters of Credit (LCs):These are used to facilitate the importation or exportation of goods and services. They can also be used to finance local transactions and contracts. They could either be sight (payable upon receipt or presentation of shipping documents) OR Usance (payable at an agreed future date).Key Features and Terms:

    • Denominated in both local and foreign currency
    • Secured by cash, collateral, commodities, fixed deposits, first class bank guarantees, GOU bonds or corporate guarantees.
    • Only fees but no interest on issued L/Cs
    • Maximum LC period of one year
    • Easy access to other credit products like Pre and post shipment Finance and structured trade and commodity finance

    Fees and commissions (charged on L/C amount)

    • 2% appraisal fees.
    • Advising: 0.5%, Confirmation: 0.3% per quarter, Quarterly commission: 0.5%
  2. Bank Guarantees:The bank issues Bid bonds, Performance guarantees, Advance payment guarantees and retention guarantees to support different contractors and service providers.Key Features and Terms:

     

    • Denominated in both local and foreign currency
    • Must be secured by either cash, collateral , commodities, fixed deposits, GOU bonds or corporate guarantees.
    • No interest on issued Guarantees
    • Maximum period of one year.

    Fees and commissions (charged on Guarantee amount)

    • 2% appraisal fees
    • Advising: 0.5%, Quarterly commission: 0.5%
  3. Bills on Collection: These facilitate trade transactions between two parties with the importer and exporter banks acting as handlers for the payment and documents representing the goods.They work similarly to Letters of credit except that the bank does not give an undertaking for the documents or payment, but acts as a mere handler of the same. Payment can either be at sight or on an agreed future date. They are usually used with another credit facility in place.Fees and commissions (charged on the bill amount): Advising: 0.5%, Quarterly commission: 0.5%

2. Short Term Loans:

Working capital facility: This is a short term loan offered by the bank to finance the working capital component of a green project or finance working capital of an existing project.

Key Features and Terms

  • Maximum period of 18 months
  • Base interest rate of 14%p.a (UGX), and 7.5%p.a (USD), (plus the risk premium determined by the bank’s interest rate model)
  • Maximum grace period of six months.
  • Denominated in local or foreign currency.
  • Security in the form of collateral which could be fixed assets, fixed deposits, First class bank guarantees, GOU bonds, reputable corporate guarantees or a lien on stocks held under collateral management.

Charges: 2% Appraisal fees

Pre-shipment Finance: A short term loan facility offered by the bank to facilitate the purchase of inputs or production or goods for onward sale or export.

Key Features and Terms

  • Must be backed by contract in place or an export L/C from a first class bank
  • Maximum tenure of 120 days (but can be revolved)
  • Base interest rate of 14%p.a (UGX), and 7.5%p.a (USD), (plus the risk premium determined by the bank’s interest rate model)
  • Denominated in local or foreign currency.
  • Security for this can be fixed assets, fixed deposits, first class bank guarantees, GOU bonds, corporate guarantees or a lien on stocks held under collateral management.

Charges: 2% Appraisal fees

Post-Shipment Finance: The bank also offers short term loans to importers for the purpose of settling payments that have matured before the importer has mobilized adequate financial resources to settle the same.

Key Features and Terms

  • Maximum tenure of 120 days
  • Base interest rate of 14%p.a (UGX), and 7.5%p.a (USD), (per annum, plus the risk premium determined by the bank’s interest rate model)
  • Denominated in local or foreign currency.
  • Security in the form of collateral which could be fixed assets, fixed deposits, first class bank guarantees, GOU bonds, corporate guarantees or stocks held under collateral management.

Charges: 2% Appraisal fees

Local Purchase of Bulk goods:Trade finance may also be granted to finance bulk purchase of goods on the local market. The product may be used by local distributors of locally manufactured goods or even goods imported by agents of specialised brands.

Key features and terms: Similar to Pre-shipment finance.

3. Structured Trade and Commodity Finance:

The bank is able to uniquely structure facilities designed to meet the client’s specific business needs. These can be applied in relation to pre and post shipment financing as well as the local purchase of bulk goods.

Loans may be granted against a lien over goods held in a commercial or bonded warehouse owned by the client or the tax authority. The lien may be substituted or supported by additional security where necessary.

Key Features and Terms

  • Must be backed by contract in place or an export L/C from a first class bank
  • Security for this may be (a) Commodity being imported with a 30% security margin OR (b) A 20% minimum client contribution on commodities being exported or bulked with the warehouse receipt system or collateral management agreement in place.
  • Maximum or minimum period is based on underlying contract.
  • Works best with non-Funded facilities like LCs and guarantees
  • If there is a disbursement of funds, interest will be charged as per applicable interest rates only on amounts utilized within a specific period.
  • Can be tailor made to suite client’s needs with financing tuned to the client’s trade cycle
  • Collateral management fees are on the account of the client.

Charges: 2% appraisal fees

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Plot 6 Nakasero Road
Rwenzori Towers, 1st Floor, Wing B
P.O.Box 7210, Kampala, Uganda