Stanbic Bank #ticker:SCBK has inked a deal with a Chinese trade agent to ease the process of sourcing and paying for imports from the Asian economy for its customers.
The bank said Wednesday Zhejiang International Trading Supply Chain Company, also known as Guomao, will link the importers with more than 10,000 suppliers in China and provide quality assurance for the goods bought.
Stanbic and Chinese lender ICBC — which owns a 20 percent stake in Stanbic’s South African parent Standard Bank — will be providing letters of credit to the importers and guarantees to exporters in China to ease the payment process.
Currently, Kenyan importers largely rely on trust when buying goods from Chinese suppliers, while the sellers also demand a big deposit of up to 50 percent before committing to manufacture the items.
Kenyans imported Sh370.8 billion worth of goods from China last year while exports stood at Sh11.1 billion.
“Previously suppliers in China have been worried that they will not be paid — so they demand upfront payment before goods are shipped — while on this end our customers are worried about the quality goods they get and whether they will arrive in the first place,” said Manessah Alagbaoso, head of Africa China Integration at Standard Bank Group.
“A letter of credit will be undertaken by Stanbic on behalf of the customer in Kenya, and ICBC on behalf of the seller in China through the agent, to protect both sides in the transaction.”
Guomao will also facilitate the travel logistics for traders looking to travel to China to source goods, provide translation and negotiation services when they are meeting suppliers.