Letters of credit (L/Cs) are written conditional undertaking issued by a bank to the Exporter at the Importer’s request to effect payment up to a stated amount within a stated time against presentation of specified documents which comply with the terms of the Credit.

Features and benefits

Letters of Credit provide comfort to the buyer & the seller that payment will be made if the terms of the L/C (mainly provision the documents required in the L/C) are met. It should be noted though that banks deal with documents only and not the actual goods or services.

How to apply

The buyer should complete an application form and provide security acceptable to the bank as may be negotiated & agreed.

Documentation required

Draft contract or proforma invoice, stating amongst others, applicable INCOTERMS.