Finance for Exports

For exporting customers our Bank is able to provide immediate financing to enable such customers to purchase produce locally, and prepare for shipment abroad.

A good track record of export business in tea, tobacco, cotton, sugar, coffee and other export products is a pre-requisite to obtaining pre-shipment finance.

This finance is extended by way of an overdraft or short term loan, and may be extended in local currency (Kwacha) or foreign currency, depending on availability of funds in the market. 

A loan against trust receipts enables our corporate customers to retain control of imported goods whilst undertaking to pay the sales proceeds to the Bank.

On receipt of shipping documents, major importers can request our Bank to store goods in a nominated warehouse under our own name, until they require releasing them against final payments.

Major importers, who order goods in bulk and have well-established reputation, but have a seasonal cash flow problem. 

Export customers who sell their goods on the open account but against firm orders from their buyers overseas, can obtain funding from our bank. Once the bank is satisfied with the credit standing of the buyers overseas, the bills of exchange, and supporting documents covering the exports will be discounted at the Bank's counters.

 

This takes the form of purchasing a sight bill or term bill of exchange for less than its face value(usually 90% of the face value of the bill). This form of financing improves our customers' cash flow by providing immediate funding against export documentary collection. 

Companies who export goods outside Malawi by way of inward confirmed irrevocable letters of credit may obtain an advance of up to 90% of the value of the export letter of credit - from the Bank.

 

Once the relative export documents under the export letter of credit are submitted to the Bank, the Bank will negotiate the documents and accompanying bill of exchange (draft) drawn at either sight or usance.

 

It is imperative that all the parties to the Letter of Credit are of good standing. Negotiation is on a strict recourse basis.

This is similar to the export discount facility. The difference is that in this case an advance against an outward collection represents only a proportion of the bill amount. The bank is not a party to the bill.