Unlock the financial tools that power African exports. From letters of credit to forfaiting, learn how to finance your trade operations and manage risk.
80% of global trade relies on some form of trade finance. Yet Africa has a $120 billion trade finance gap. Understanding your options is essential for growth.
Bank guarantee that payment will be made upon presentation of compliant documents.
High-value orders, new relationships
1-3% of transaction
5-10 days setup
Bank acts as intermediary to exchange documents for payment (D/P or D/A).
Established relationships, medium risk
0.25-1% of transaction
Faster than LC
Sell your receivables to a factor for immediate cash (typically 80-90% advance).
Cash flow needs, repeat buyers
1-5% per invoice
24-72 hours funding
Sell medium/long-term receivables at a discount, usually with bank guarantee.
Capital goods, 180+ day terms
Discount rate varies
1-2 weeks setup
Insure against buyer non-payment due to commercial or political risks.
Open account sales, new markets
0.5-2% of invoice
Immediate coverage
Bank guarantees performance, advance payment, or bid bonds.
Large contracts, tenders
1-3% annually
3-7 days
Finance needed to produce goods before export
30-90 days, 60-80% of order value
Finance during manufacturing or processing
Up to 180 days, against confirmed orders
Finance after goods shipped but before payment received
30-180 days, 80-100% of invoice
| Method | Security | Cost |
|---|---|---|
| Advance Payment | Highest (for seller) | None |
| Letter of Credit | Very High | 1-3% |
| Documentary Collection | Medium | 0.25-1% |
| Open Account + Insurance | Medium-High | 0.5-2% |
| Factoring | High | 1-5% |
DFIs provide critical trade finance support, especially where commercial banks are reluctant. They often offer better terms and longer tenors for African exporters.
Intra-African trade, commodity finance, factoring
Trade finance programs, SME lending
Private sector development, supply chain finance
Eastern & Southern Africa trade finance
Infrastructure and industrial projects
Political & commercial risks
Egyptian exports
South African exports
Islamic trade finance
Intra-African trade
Global coverage
Match finance instrument to your risk tolerance and cash flow needs
DFIs offer better terms for African exporters than commercial banks
Export insurance can unlock open account sales
Factor costs into your pricing from the start
