Equity Bank therefore allows its client an additional credit period, which is un-disclosed to the seller. The facility is usually granted for bills drawn under an import usance letter of credit.
A written irrevocable undertaking issued by the bank to pay to the beneficiary a specific sum of money on demand in the event that its customer (applicant) has not fulfilled his contractual obligations, within the validity of the guarantee.
Letters of Credit
A Letter of Credit is an undertaking issued by a bank (Issuing Bank) for the account of the buyer (the applicant) to pay the beneficiary (the seller), provided that the terms of the Letter of Credit are complied with. It is generally used to facilitate importation / Exportation of goods and services as well as local trade.
Financing of customer’s LPO at an agreed fee and commission. The facility will be applicable to customers who normally trade with reputable companies with good credit rating.
Giving value to the seller for services/goods sold on credit terms (e.g. 60 days, 90 days…) before maturity date subject to confirmation of the acceptance by drawee through their bankers.
Facility offered by the Bank to the customer to purchase inputs for the production process of goods which are for onward sale/export.
Foreign Demand Drafts
It is a service for facilitating payments for clients who require guarantee for making payments abroad.