A Letter of Credit is a facility provided by the bank to its import customers to enable them import the goods and services from abroad without necessarily making payment in advance to the exporter.
Benefits

• Payment is guaranteed by both the issuing bank and the confirming bank as long as compliant documents are presented
• Mitigates the buyer/country risks
• Can allow multiple/continuous shipments
• Allows access to other products e.g. pre-shipment finance and structured finance
• Quality of products and price guaranteed by an independent pre-shipment inspection company

Requirements

• Import LC opening
• A credit facility or cash margin
• Declaration payment for imports form duly signed by the customer
• Pro forma invoice from the seller or provider of services
• Copy of Import Declaration Form (IDF)
• Certificate of insurance or copy of marine insurance policy, if covered locally
• LC application form duly signed
• Documentary Collections/ Bills for collection