Kingdom Bank

Trade Finance

Kingdom Bank Trade Finance solutions are meant for contractors and suppliers of Government related agencies and private sector.

Trade Finance, Level up your business with Kingdom Bank.

Trade Finance Products
Bid Bond, Performance Guarantee, Advance payment guarantee, Letters of Credit/Documentary Credit, Documentary Collection & Clean Collection
Get in touch with us?
Talk to us on mobile 0709 881 300 SMS/WhatsApp on 0703112779 Email: info@kingdombankltd.co.ke or fill out the form below.

Bid Bonds

A Bid Bond is issued as part of a supply bidding process by a contractor to a project owner, in the hope that it would guarantee that the winning bidder will undertake the contract under the terms at which they bid.

The cash deposit is subject to full or partial forfeiture if the winning contractor fails to either execute the contract or provide the required performance and/or payment bonds.

The bid bond assures and guarantees that should the bidder be successful, the bidder will execute the contract and provide the required surety bonds. A Bid Bond of the amount not above 10% of the contract order total amount is deposited when a contractor, or the “supplier”, is bidding on a tendered contract.

Tenure:
Maximum 180 days.

Security:

  • 5 million and below – unsecured for new customers.
  • 10 million and below – unsecured for existing customers.
  • Above 5 million – has to be secured by conventional security for new customers.
  • Above 10 million – has to be secured by conventional security for existing customers.

Eligibility Requirements for a Bid Bond at Kingdom Bank.

Performance Guarantee

We issue surety bonds to guarantee satisfactory completion of a project by a contractor in accordance with the terms and conditions of the contract.

Performance Guarantees are commonly used in the construction and development of real property, where an owner or investor may require the developer to assure that contractors or project managers procure such bonds in order to guarantee that the value of the work will not be lost in the case of an unfortunate event (such as insolvency of the contractor).

In other cases, a performance bond may be requested to be issued in other large contracts besides civil construction projects. Another example of this use is in commodity contracts where the seller is asked to provide a Bond to reassure the buyer that if the commodity being sold is not in fact delivered (for whatever reason) the buyer will at least receive compensation for his lost costs.

Tenure:
12 months renewable

Security:

  • More than 3 years experience – 100% tangible security
  • Less than 3 years experience – 20% cash cover, 80% conventional security
  • Insurance cover by AGF, ATI, USAID, GUARANTCO

Eligibility Requirements for a Performance Guarantee at Kingdom Bank

  • Award letter
  • Must be a Kingdom Bank account holder – You can find our account offerings here
  • The counter-party must be within the bank approved entity
  • Copy of contract
  • Copy of performance bond if not issued by the bank

Advance Payment Guarantee

If the client agrees to make an advance payment (sometimes referred to as a down payment) to a supplier, a guarantee may be required to secure the payment against default by the contractor. This is referred to as an advance payment guarantee (APG). This is an instrument issued by Kingdom Bank on behalf of our customer to secure upfront payments to them by third parties for jobs awarded to, but not yet executed by, the contractor or customer.

Typically on a construction project, an advanced payment guarantee will be required by the client if the contractor requests advance payment to help them meet significant start-up or procurement costs that may have to be incurred before construction begins. For example where the contractor has had to purchase a high-value plant, equipment, or materials specifically for the project. The bond will protect the client in the event that the contractor fails to fulfill its contractual obligations, for example, if the contractor becomes insolvent.

An advance payment guarantee will normally be an on-demand bond, meaning that the bondsman pays the amount of money set out in the bond immediately on demand, without any preconditions having to be met. This is as opposed to a conditional bond (or default bond) where the bondsman is only liable if it has been established that there has been a breach of contract.

Tenure:
12 months renewable (exemption up to 24 months).

Security:

  • More than 3 years experience – 100% tangible security.
  • Less than 3 years experience – 20% cash cover, 80% conventional security.
  • Insurance cover by AGF, ATI, USAID, GUARANTCO.

Eligibility Requirements for an Advance Payment Guarantee at Kingdom Bank.

Letters of Credit/ Documentary Credit

Letters of credit help to cover your trading risks by allowing you to protect against defaults on delivery from local or overseas suppliers and guarantees your payments abroad.

Advantages of Letters of Credit/ Documentary Credit.

  • Gives you the reassurance of a secure, globally recognized method of settling overseas trade
  • Offers flexibility as we can match your letter of credit to your business needs and payment can be made for any amount and in any freely traded currency.
  • Enables you to negotiate improved credit terms if you are importing goods, thereby improving your cash flow.
  • Your letters of credit will be subject to the International Chamber of Commerce’s rules for Documentary Credits providing you with reassurance that worldwide standards apply to you and your trading partner

Tenure:
Maximum 180 days

Security:

  • More than 3 years experience – 100% tangible security with Post Import Finance.
  • Less than 3 years experience – 50% cash cover, 50% conventional security with Post Import Finance
  • Master LC with at least 30% headroom above the value of slave LC

Eligibility Requirements for a Letters of Credit at Kingdom Bank

Documentary Collection

Through our documentary collections service, Kingdom Bank handles the documentary management process on behalf of both importers and exporters, acting as an agent for the collection and remittance of payments. Documents are submitted directly to Kingdom Bank on the instruction of the exporter. The bank accepts no risk of non-payment by the importer.

Tenure:
As per exporter’s instructions

Security:

  • None where bank confirmation/ avalisation is not required.
  • 100% cash cover or term loan facility as per policy.

Eligibility Requirements for Documentary Collection at Kingdom Bank

Clean Collection

This is a letter of instruction to a presenting bank accompanied by a draft and often invoices, but not accompanied by any document restricting possession or ownership of the relevant goods.

Tenure:
As per exporter’s instructions.

Security:

  • None where bank confirmation/ avalisation is not required.
  • 100% cash cover or term loan facility as per policy.

Eligibility Requirements for Clean Collection at Kingdom Bank

SIGN UP FOR A TRADE FINANCE CONSULTATION

Trade Finance Information Form

Trade Finance Pricing: Fees and Commissions

Bid Bond

·       0.5% per instrument plus excise duty.

·       Base charge: KSh. 2000 plus excise duty.

Performance Bond

·       0.5% per quarter plus excise duty.

·       Base charge KSh.  5,000 plus excise duty.

Advance Payment Guarantee

·       0.5% per quarter plus excise duty.

·       Base charge KSh.  5,000 plus excise duty.

Letters of Credit

·       Advising fee – KSh.  3500.

·       Confirmation fee – 0.375% per quarter, Minimum KSh.  5000

·       Discount Commission – 0.375% per quarter, minimum KSh. 5000.

·       Cancellation charges – KSh. 2000

·       Acceptance commission – 0.375% per quarter, minimum KSh. 5000

·       Payment/Settlement fees – 0.375% flat , minimum KSh. 5000.

·       Swift fees – KSh. 3500

Clean and Documentary Bills for Collection

·       Presentation for payment – 0.10% flat, minimum KSh. 5000.

·       Acceptance commission – 0.25% per quarter, minimum KSh.5000.

·       Handling fees on returned/unaccepted items – USD50 + courier Charges.

Account Opening Requirements for Businesses.

  • Memorandum of Articles of Association,
  • Registration Certificate and
  • Director’s Resolutions are required.
  • Copy of KRA PIN’s for the Directors and the company.
Forex Rates by October 4, 2022
USD: BUY 119.90 SELL 126.60GBP: BUY 135.30 SELL 145.55EUR: BUY 117.70 SELL 127.20