An import letter of credit may be suitable where a supplier wants a bank-backed undertaking that payment will be made once the documents and conditions specified in the LC are met. DTB offers import letters of credit to customers who bank with DTB, subject to assessment and security. Speak to DTB before agreeing final supplier terms so the LC wording, documents, amount, currency and shipment conditions can be reviewed.

At the importer’s request, the bank issues a letter of credit in favour of the supplier or beneficiary. The LC sets out the amount, expiry, shipment terms and documents that must be presented. Payment is then handled according to the LC terms when compliant documents are presented. Because the exact structure matters, the importer should make sure the supplier contract and LC terms are aligned before issuance.

DTB’s published Trade Finance page lists import letters of credit in KES, USD, GBP and EUR. Whether a particular supplier, country, bank, shipping route or transaction can be supported depends on the transaction details, compliance checks and correspondent-bank arrangements. Share your pro-forma invoice and proposed terms with DTB early so the Bank can confirm what is possible before you commit to the supplier.

DTB lists standard business and identification documents based on the applicant’s legal structure. For letters of credit, additional documents include an invoice for a local LC or an Import Declaration Form for a foreign LC, plus marine cover. DTB may request further information depending on the transaction, security and compliance requirements.

DTB states that letters of credit are normally opened for customers who bank with DTB. If you do not currently bank with DTB, contact the Bank to understand the account-opening and facility-assessment steps before committing to an LC-based supplier payment arrangement.

DTB states that letters of credit are fully secured and that the amount covered varies case by case depending on the nature and value of the tangible security held. The Bank will assess the proposed transaction and security before approving the facility. Do not assume that an LC is unsecured or that a specific asset will automatically be accepted.

DTB publishes an opening commission of 0.50% per quarter with a minimum charge of KES 3,000, plus published SWIFT, postage and revenue-stamp charges. Acceptance and settlement commissions and related charges may also apply depending on the LC. All charges are subject to applicable tax. Confirm the current total cost for your specific amount, tenor and LC structure with DTB before issuance.

A sight LC generally provides for payment when compliant documents are presented and accepted under the LC terms. An acceptance or usance structure provides for payment at a future agreed date after compliant presentation and acceptance. DTB publishes both settlement and acceptance charges, but the exact LC type available for your transaction should be confirmed with the Trade Finance team.

Documentary collection is a trade process in which banks handle trade documents and payment or acceptance instructions between the exporter and importer. It is often considered where the buyer and seller already have an established level of trust and do not require the same bank payment undertaking as a letter of credit. DTB handles both import and export bills on collection, subject to the collection instructions and transaction requirements.

A letter of credit involves a bank undertaking to pay when the specified LC conditions and documents are complied with. In a documentary collection, banks primarily act as agents handling documents and payment or acceptance instructions; they do not provide the same payment undertaking simply by processing the collection. The right choice depends on the trust between buyer and seller, contract terms, risk level and cost considerations.

Yes. DTB states that it handles import bills on collection and receives bills from correspondent banks for presentation to the local buyer. The documents are processed according to the collection instructions. Contact DTB when you receive notice of an incoming collection so you can understand the payment or acceptance requirements and applicable charges.

DTB handles export bills on collection, allowing export documents and collection instructions to be sent through the banking channel for presentation to the buyer or buyer’s bank. This can help structure document handling and collection, but it is not the same as a bank guarantee of payment. Discuss the buyer relationship, payment terms and destination with DTB before shipment.

A bank guarantee is an undertaking issued by a bank on behalf of a customer in favour of a beneficiary under specified terms. Businesses may need guarantees when bidding for contracts, receiving an advance payment or being required to guarantee performance after contract award. DTB lists bid bonds, advance payment guarantees and performance guarantees among its trade finance guarantee products.

DTB’s published Trade Finance page lists bid bonds, advance payment guarantees and performance guarantees among the guarantee commitments it issues. The exact wording, amount, validity period and approval requirements depend on the underlying tender or contract. Provide DTB with the required guarantee format and supporting tender or contract documents for review.

Both instruments can reduce commercial risk, but they solve different problems. A letter of credit is commonly used to support payment for a trade transaction against specified documents. A bank guarantee generally supports a contractual obligation and may be called on if the applicant fails to meet the guarantee terms. If you are unsure which one your supplier or customer requires, share the contract or tender wording with DTB before applying.

DTB publishes an issuing commission of 0.50% per quarter or a minimum of KES 2,500. For a cash-covered guarantee, the published commission is 0.25% per quarter or a minimum of KES 2,500. All charges are subject to applicable tax. The total cost depends on the guarantee amount, validity and structure, so confirm the current pricing with DTB.

DTB publishes requirements for individuals, sole proprietors, partnerships and companies, so Trade Finance is not limited to large corporates. Approval still depends on the business, transaction, financial information, security where required and the Bank’s assessment. SMEs that import stock, export goods, bid for contracts or need performance or advance-payment guarantees can speak to DTB about the appropriate instrument.

Yes. DTB’s published Trade Finance page lists KES, USD, GBP and EUR for letters of credit and bank guarantees. The suitable currency should normally align with the underlying invoice, contract or obligation. Confirm availability and any foreign-exchange or settlement requirements with DTB before the instrument is issued.

Compare whether the bank supports the instrument you actually need, accepted currencies, security requirements, charges, document-handling capability, correspondent-bank reach, turnaround expectations, trade expertise and support when transaction documents need clarification. DTB offers import letters of credit, documentary collections and bank guarantees in multiple currencies, with published charges and requirements. The best fit will depend on your specific supplier, buyer, contract and transaction structure.