NMB TRADE FINANCE PRODUCT

Trade Finance provides clients with efficient and effective structures to support domestic and international trade business. Solutions offered by the bank’s Trade Finance unit include;

• Letters of Credit (import and export): A Letter of Credit issued by NMB Plc is an irrevocable undertaking which gives assurance to buyers and suppliers that, upon shipment and submission of compliant documents the buyer will take delivery of the specified goods while the supplier will receive the related payment. This creates comfort to the two parties, the buyer and seller that terms and conditions of the contract will be adhered to, reducing risks associated to delivery and payment. 

At NMB we maintain strong relationships with international and reputable correspondent banks and work closely to facilitate the end to end process of international trade finance transactions. This may be for purposes of routing, advising or confirming financial instruments on behalf of our clients.

• Guarantees: At NMB we do issue guarantees which allows our clients to gain better business contract conditions. The guarantee is an undertaking by the bank that the specified sum will be paid to the entitled beneficiary upon a written request the ordering party did not fulfil its commitments.

Based on the client's requirements, guarantees can be issued in various forms ranging from Bid Bonds, Performance Bonds, Advance Payments Bonds, Transit Bonds, Shipping Guarantees, Bonded Warehouse/Custom Bonds and any other specific guarantee as requested by the client.

• Documentary Collection (import and export): This is a non-binding documentary payment mechanism where NMB becomes an authorized intermediary to procure payment against documents, allowing the importer or exporter to focus on handling the goods.

For importers, NMB handles import bills for collection for our clients, where the supplier requests their bank to send shipping documents to NMB and our client receives prompt advice upon receipt of documents at our counters. Upon acceptance of the documents by the client, payment to the supplier is effected by NMB as per instructions.

Exporters, can simplify dispatch documents to NMB with instructions to courier to the buyers bank and the bank will track payment. Reconciliation of export collections will be provided regardless of whether terms are documents against acceptance, documents against payment or clean collections. Discounting of export collections is also available for documents against acceptance to allow for acceleration of export receivables.

• Post Import Loans: Based on prior arrangements with NMB, the bank is able to provide financing solutions to pay for the supplier’s documents under Letter of Credit or Import Collections, giving the importer time to convert the imported goods into cash and repay upon maturity of the loan. The tenor of the loan is within an agreed time-frame aligned to the working capital cycle.
• Invoice Financing: NMB offers invoice financing to its clients where both buyer and seller are NMB clients and there is an arrangement in place outlining the roles and responsibilities of each party as well as terms and conditions for the receivables financing. At NMB, we either finance the entire invoice amount or discount the invoice and finance the client with a discounted amount.
• Pre-Shipment Loans: Traditionally a pre-shipment loan provides working capital financing to the producer. The financing will be for the period it takes to procure raw material, manufacture or sell and receiving proceeds from sales. NMB will advance funds to the producer against a confirmed order from the off-taker or against a Letter of Credit. Producers will use the funds to purchase and process raw materials until delivery of goods to the buyer as pre-described in the sales contract, and in turn the buyer pays NMB in a designated collection account to liquidate the loan.
• Stock Financing: This is an arrangement under which the bank provides pre/post shipment financing where the collateral provider transfers rights on the collateral (financed stock) to the bank. The stock acts as security for the bank to extend credit facilities to the collateral provider (the borrower). The bank will use Collateral Managers to take custody of, and monitor the collateral under a tripartite Collateral Management Agreement. 

We have a dedicated team of Trade Specialists to advise clients on optimal structures and solutions based on the underlying trade or working capital cycle.

Please visit or contact your nearest NMB branch or use our toll free number - 0800 002 002.