Trade finance providers

Overview

Access to working capital and payment security is often the binding constraint for a small Kenyan exporter, and several tiers of provider exist. Commercial banks in Kenya (including Equity Bank, KCB, Co-operative Bank and Bank of Africa) offer letters of credit, documentary collections, invoice discounting, pre- and post-shipment finance and export guarantees. Regional development finance is available through the Eastern and Southern African Trade and Development Bank (TDB), the financial arm serving COMESA states, and the African Export-Import Bank (Afreximbank), both of which Kenya is a shareholder in. The African Development Bank (AfDB) supports SME trade indirectly through guarantee facilities placed with local banks, for example a trade-finance guarantee line extended to Equity Bank to confirm letters of credit. For a small exporter the realistic starting point is a trade-finance facility at your commercial bank, backed where possible by these regional lines; note that Africa's trade-finance gap is large and banks require documentation, so having clean financial records and confirmed orders materially improves approval odds.