One of the challenges faced by Kenyan entrepreneurs who rely on imported goods is the high cost of importation, which has made some businesses unable to reach their potential.

To help address this challenge, the Co-operative Bank of Kenya introduced the Import Duty Financing Solution to help importers have a seamless process during clearing and transportation of imported cargo from either the port or airport to the final destination.

The product which targets importers of goods and services seeks to solve the unexpected costs incurred during importation by providing working capital to facilitate duty payment, clearing costs or any other logistical expenses associated with the clearance of imported goods.

It covers various business groups including importers of motor vehicles and equipment, importers of second-hand items for sale, importers of other goods such as manufacturers (raw materials), construction materials suppliers or other businesses, as well as clearing and logistics companies.

According to Co-op Bank, the facility is booked in the customer’s account and payments/disbursements are done directly to the service provider e.g. KRA against proforma invoices.

Under the product, the lender offers financing of up to 100% of the value of invoice or quotation raised by third parties (KRA, clearing agent, freight company, etc.).

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”Facility will revolve for 12 months upon which the applicant will be reviewed for renewal. One-off applications allowed,’’ Co-op states.

To be eligible, customers in the import business must be in business for more than six months and demonstrate having undertaken an import transaction previously.

On the other hand, customers in the MSME sector must be importing for purposes of reselling, increasing efficiency, productivity, or own use. No proof for a previous import transaction is required for MSME customers.

In addition, Co-op requires that customers present some documents which include:

• 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 requirements as per the MSME lending terms – strong financials, good account conducts, debt ratio-below 50%  & all KYC & supporting documents.

Benefits of Co-op Bank Import Duty Finance

The product 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.

For more information about Co-op Bank’s Import Duty Financing, visit the nearest Co-op bank branch countrywide or contact its team via 020-2776000, 0703027000 or [email protected]