Customer Needs/Benefits
The Import Duty Finance Product is a Solution Meant to Facilitate MSME Importers to;
- Pay for import duty and other related costs promptly
- Pay for storage charges and demurrages if any
- Pay for clearing, forwarding and other logistics costs
- Facilitate transportation of goods from the port to the final destination.
- Enable the importer to avoid high storage and demurrage charges at the port
- Enable the importer to avoid auction of goods imported, due to non-payment of duty.
Purpose
Working Capital – To facilitate KRA duty payment, clearing costs or any other logistical costs associated with clearance of imported goods
Target Market.
The product will target the following groups:
Importers of Motor Vehicles and Equipment:
- For own use (Individual or company),
- For sale (Motor Vehicle dealers)
Importers of Second-Hand Items For Sale:
- These are business people who import second-hand goods for resale in Kenya and other neighbouring countries. Business people in Gikomba market will be the target clientele to take up this product.
Importers of Other Goods:
- E.g. manufacturers (raw materials), construction materials suppliers or other businesses etc.
- Clearing and Logistics Firms:
- These are firms that offer clearing and forwarding services as well as logistical solutions
Facility features:
- Amount Financed – Up to 100% of the value of invoice or quotation raised by third parties (KRA, Clearing agent, Freight Company, etc.).
- Tenor – Facility will revolve for 12 months upon which the applicant will be reviewed for renewal. One-off applications allowed.
- Debt Ratio – 50%
- Limits To Be Funded – Minimum amounts Kshs. 50,000/=
Facility Repayment Tenure:
- Consumers, Individuals and End Users
- Equal monthly instalments for a maximum period of 12 months
- Car Dealers, Clearing Agents and Other Importers Of Goods
- Bullet payment or monthly instalments (depending on the type of transaction).
- Maximum Tenor
- 180 days for bullet transactions or 12 months for monthly payment transactions.
Pricing:
|
|
| Loan Processing Fee: |
2.5% of the facility amount |
| Interest: |
CBR +4% p.a. currently at 13% p.a |
| Late Payment Fee: |
0.25% p.a |
Security Type/Colateral
Chattels (Motor Vehicles) up to Kes.2 Million (150% Security Coverage)
- Landed property for exposures above Kes.2 Million.
- Cash cover also accepted
- Customers importing motor vehicles can use the same vehicle as security (Joint registration of vehicle handled by a Bank appointed clearing agent after disbursement of the facility)
- Collateral Management Agreement (imported goods are pledged as collateral) on case to case basis
Qualification Criteria
- Customers in Import Business
- The customer must be in business for more than six months and demonstrate having undertaken an import transaction previously
- MSME Customers
- Importing for purposes of reselling, increasing efficiency, productivity or own use
- No proof for a previous import transaction
- Customer Applies for facility
Customer Application
- A Quotation for duty (duty entry form) and other related charges,
- Copy of Import documents: (Bill of lading/Airway Bill, Commercial Invoice, copy Inspection certificate by KEBS certified agent, IDF, etc.)
- For motor vehicles – Export Certificate (Japanese Logbook) & Inspection Certificate issued by QISJ or any other inspection company approved by KEBS.
- All the other requirement as per the MSME lending terms-Strong Financials, Good account conducts, Debt ratio-below 50% & all KYC & supporting documents
Process Flow:
- Facility appraised at branch/business unit and forwarded to credit analysis for approval
- Customer executes offer letter and other contractual documents
- Branch/business unit sends documents to credit administration for limit loading (memo code 6N7)
- Credit administration approves and forwards limit loading request to credit operations
- Credit operations unit marks import duty finance limit
- Trade services to disburse facility and remit payment directly to third parties
