An import letter of credit may be suitable when a supplier wants bank-backed payment assurance before manufacturing or shipping goods. DTB can issue an LC subject to credit assessment, security and agreed terms. Speak to DTB before finalising the supplier contract so the required documents, shipment conditions, payment timing and LC wording can be aligned.

Not necessarily in the same way as a simple advance payment. Under an LC, payment depends on the agreed LC structure and the presentation of compliant documents. A sight LC may provide for payment when compliant documents are presented, while an acceptance or deferred-payment structure may provide for payment later. DTB must approve the specific structure.

A sight LC generally provides for payment after compliant documents are presented and examined under the LC terms. A usance, term or acceptance LC provides for payment after an agreed future period, subject to the LC conditions. DTB publishes an acceptance commission for applicable LCs, but the available payment structure depends on the transaction and Bank approval.

DTB currently lists an invoice for a local LC, an Import Declaration Form for a foreign LC and marine cover. Because an LC is a credit facility, DTB also assesses business, financial, banking and security documents depending on whether the applicant is a sole proprietor, partnership or company.

DTB states that Letters of Credit are normally opened for customers who bank with DTB. If your business does not currently bank with DTB, contact the Bank early to understand the account-opening and facility-assessment process before committing to LC payment terms with a supplier.

DTB states that its Letters of Credit are fully secured and that the amount covered varies case by case depending on the nature and value of tangible security held. The Bank will assess the proposed security together with the business and transaction before approving the LC facility.

DTB does not publish a fixed maximum LC amount. The amount is assessed case by case based on the underlying transaction, the applicant's financial position, the nature and value of security and DTB's credit assessment.

DTB currently publishes KES, USD, GBP and EUR for Letters of Credit. The LC currency should normally match the underlying invoice or trade contract, subject to DTB approval and any applicable foreign-exchange requirements.

DTB's August 2026 tariff publishes an opening commission of 0.50% per quarter or part thereof, with a minimum KES 3,000, plus a KES 4,000 SWIFT opening charge and applicable postage/correspondent charges. Acceptance, settlement, amendment or other charges may apply depending on the LC. Confirm the full current cost for your amount and tenor before issuance.

It means the opening commission is calculated using the published quarterly rate for each quarter, or portion of a quarter, covered by the LC validity/tenor under the Bank's tariff rules. Ask DTB to provide the actual commission calculation for your LC amount and validity period before you authorise issuance.

DTB's August 2026 Tariff Guide currently lists an LC amendment commission of KES 3,500 and a KES 1,500 SWIFT charge for other messages or amendments. Correspondent-bank or other transaction-specific charges may also apply. Confirm the total amendment cost before instructing the Bank.

Cancellation depends on the LC terms, status and the agreement of the relevant parties/banks where required. DTB's current tariff lists a KES 1,500 cancellation charge. Do not assume an issued LC can be unilaterally cancelled; contact DTB immediately if the underlying trade changes.

A mismatch is commonly referred to as a discrepancy. Because LC payment is document-based, discrepancies can delay or affect honour of the presentation and may require instructions, amendments or acceptance by the applicant, depending on the circumstances. Clear LC wording and careful document preparation can reduce this risk.

No. A letter of credit is primarily a documentary payment mechanism. Banks examine the documents required by the LC rather than physically inspecting the goods. Importers should separately manage supplier due diligence, specifications, inspections, shipping and contractual remedies.

DTB lists marine cover among the requirements for Letters of Credit. Insurance can help address transit risks for goods being shipped, depending on the trade terms and transaction. The required cover, insured party and policy wording should align with the shipment and LC terms.

An export LC is a letter of credit issued by a buyer's bank in favour of the exporter. DTB can support Kenyan exporters by advising qualifying LCs, confirming eligible LCs and negotiating bills/documents under the LC, subject to the transaction terms and the Bank's requirements.

Advising generally means DTB authenticates the LC it receives through the banking channel and communicates it to the beneficiary/exporter without automatically adding its own payment undertaking. DTB currently publishes an export LC advising commission of KES 1,500.

Confirmation is an additional undertaking by a confirming bank to honour a complying presentation, subject to the confirmed LC terms. An exporter may request confirmation when it wants additional bank risk protection beyond the issuing bank. DTB currently publishes a confirmation commission of 0.25% per quarter or part thereof, minimum KES 1,500, plus advising commission, subject to approval.

Negotiation generally involves a bank purchasing or advancing value against a complying presentation under a negotiable LC, subject to the LC terms and bank approval. DTB currently publishes a negotiation charge of 0.25%, minimum KES 2,000, for bills under an export LC.

A letter of credit provides a bank undertaking to honour payment when compliant documents are presented, while documentary collection generally uses banks to handle documents and payment instructions without the same issuing-bank payment undertaking. An LC can be more suitable where the parties need stronger payment assurance; collection can suit an established trading relationship where the parties accept more counterparty risk.

A letter of credit is commonly used as a primary payment mechanism in a trade transaction, with payment linked to compliant documents. A bank guarantee is generally a secondary undertaking that may be called if the applicant fails to perform or pay under the underlying contract, depending on the guarantee wording. DTB offers both products, but they solve different trade and contractual risks.

Advance payment gives the supplier funds before the buyer receives goods or documents, creating performance risk for the buyer. An LC can link payment to specified documents and provide bank-backed assurance to the supplier. However, an LC adds banking costs and still does not guarantee the physical quality of goods. The right option depends on supplier trust, bargaining power, transaction size and risk.

Yes. DTB publishes facility requirements for individuals, sole proprietors, partnerships and companies, so LCs are not limited to large corporates. Approval still depends on the transaction, financial information, banking relationship, security and DTB's credit assessment.

DTB's standalone page does not publish a guaranteed turnaround time. Timing depends on facility approval, security perfection, completeness of the application, LC wording, beneficiary/bank details, compliance checks and whether amendments are needed. Start the process before the supplier's shipment deadline rather than treating LC issuance as a last-minute payment step.

Compare LC expertise, accepted currencies, credit/security requirements, opening and amendment charges, SWIFT and correspondent-bank costs, turnaround expectations, correspondent-bank reach, document-review support, export advising/confirmation capability and how well the bank can help structure the LC before supplier terms are finalised. DTB offers import and export LC services in KES, USD, GBP and EUR with published tariffs.