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Trade Finance

Trade finance

We are uniquely positioned to provide financial solutions through the commercial and commodity related trade value chain, facilitating trade flows between Uganda, the rest of Africa and countries around the world helping you move your goods and services across borders

Some of the benefits

Versatile

We support import and export requirements

Global

The loan is available in different International currencies

Secure

The safest way to manage your imports and exports

Reliable

Maintain cash-flow while transacting across borders
What you get
  • Available to support both import and export transactions.
  • Most secured mode of payment in international trade.
  • Available international currencies globally.
  • Risk of non-payment and non-delivery does not exist as both parties are bound by conditionsthat must be met for both delivery and payment.
  • Provides financing structure to suit individual importers’ and exporters’ needs.
Types of Trade Finance
  1. Guarantees

A guarantee is a written undertaking issued by a bank in favour of the beneficiary, whereby it pledges to make certain payments on behalf of its client (applicant), if the latter fails to perform in accordance with the terms of their commercial contract.

The bank’s commitment is legally independent of the underlying commercial contract.

What you get

  • Cash Covered or Secured by Facility Limit.
  • Single day Turn Around Time for Issuing.
  • Provides security against unpaid customs duties when goods are imported temporally into the country

 

What it costs

  • Establishment Fee: 0.75% or 1% of the guarantee amount
  • Quarterly Commission: 0.75% or 1%
  • Stamp duty fees:15% of total commission

 

2. Letters of Credit

A Letter of Credit (LC) is also referred to as a Documentary Credit. It is a contractual agreement whereby a bank in the buyers’ country, known as the issuing bank, acting on behalf of its customer (importer) authorizes a bank in the sellers’ country known as advising bank, to make payment to the beneficiary against the receipt of stipulated document. LCs can either be cash backed (financed by customer) or financed by the bank.

What it costs

  • Establishment Fee: 0.75% or 1% of the guarantee amount
  • Quarterly Commission: 0.75% or 1%
  • Stamp duty fees:15% of total commission

 

3. Documentary Collections

This is a method of payment in international trade.  The method is useful where the importer has a relationship with the exporter and the exporter is willing to dispatch goods based on an agreed period of credit.  The exporter draws a bill of exchange payable on a specified date on the importer.

After acceptance, the bill is returned to the exporter who then attaches all the relevant documents for delivery to his bankers who will forward them to the importers bank. The bill of exchange can either be a clean bill or documentary bill.

What you get

  • Documents against payment or acceptance.
  • Documents against acceptance – avalisation and discounting.

What it costs

  • Fees: 0.25% of the Invoice amount

What you will need

  • Business Legal documents.
  • Business' financial statements, including and income statement, balance sheet and cash. flow 
  • A 12-month cash flow forecast. 
  • Proof of equity contribution and the source of these funds. 
  • Business' bank statements for the past six months.
How to get it

Contact the Enterprise Direct Centre on 0312226600 or visit a Business banker at your nearest branch

  • What you get
  • Types of Trade Finance
  • How to get it
  • Available to support both import and export transactions.
  • Most secured mode of payment in international trade.
  • Available international currencies globally.
  • Risk of non-payment and non-delivery does not exist as both parties are bound by conditionsthat must be met for both delivery and payment.
  • Provides financing structure to suit individual importers’ and exporters’ needs.
  1. Guarantees

A guarantee is a written undertaking issued by a bank in favour of the beneficiary, whereby it pledges to make certain payments on behalf of its client (applicant), if the latter fails to perform in accordance with the terms of their commercial contract.

The bank’s commitment is legally independent of the underlying commercial contract.

What you get

  • Cash Covered or Secured by Facility Limit.
  • Single day Turn Around Time for Issuing.
  • Provides security against unpaid customs duties when goods are imported temporally into the country

 

What it costs

  • Establishment Fee: 0.75% or 1% of the guarantee amount
  • Quarterly Commission: 0.75% or 1%
  • Stamp duty fees:15% of total commission

 

2. Letters of Credit

A Letter of Credit (LC) is also referred to as a Documentary Credit. It is a contractual agreement whereby a bank in the buyers’ country, known as the issuing bank, acting on behalf of its customer (importer) authorizes a bank in the sellers’ country known as advising bank, to make payment to the beneficiary against the receipt of stipulated document. LCs can either be cash backed (financed by customer) or financed by the bank.

What it costs

  • Establishment Fee: 0.75% or 1% of the guarantee amount
  • Quarterly Commission: 0.75% or 1%
  • Stamp duty fees:15% of total commission

 

3. Documentary Collections

This is a method of payment in international trade.  The method is useful where the importer has a relationship with the exporter and the exporter is willing to dispatch goods based on an agreed period of credit.  The exporter draws a bill of exchange payable on a specified date on the importer.

After acceptance, the bill is returned to the exporter who then attaches all the relevant documents for delivery to his bankers who will forward them to the importers bank. The bill of exchange can either be a clean bill or documentary bill.

What you get

  • Documents against payment or acceptance.
  • Documents against acceptance – avalisation and discounting.

What it costs

  • Fees: 0.25% of the Invoice amount

What you will need

  • Business Legal documents.
  • Business' financial statements, including and income statement, balance sheet and cash. flow 
  • A 12-month cash flow forecast. 
  • Proof of equity contribution and the source of these funds. 
  • Business' bank statements for the past six months.

Contact the Enterprise Direct Centre on 0312226600 or visit a Business banker at your nearest branch

We also offer
BizSure
Trade Insurance

This policy provides cover for goods in transit by sea, air, road, and rail. Loss of profits insurance following loss of goods during the transit and Cover for goods during storage after the voyage.

Business Current official image
Business Current Account

Manage your business conveniently and access a wide range of financial services and tailored transactional business solutions to help grow your business. With the business current account, you are able to make quick payments, transfers, keep audit trail and access business loans.