Letters of Credit (LCs)
Letters of Credit are essential financial instruments that facilitate international trade by guaranteeing payment to the seller from the buyer's bank, provided the terms and conditions outlined in the LC are met. These instruments can be either revocable or irrevocable and are widely used to mitigate transaction risks.
Features
- Payment Guarantee: Zenith Bank issues Letters of Credit (LCs) to guarantee payment from the buyer’s bank to the seller upon fulfillment of the specified terms and conditions. This provides a secure mechanism for international trade transactions.
- Risk Mitigation: By using Zenith Bank’s LCs, businesses can mitigate risks associated with international trade, as payment is assured only when all contractual terms are met.
Benefits
- For Sellers: Zenith Bank’s LCs provide a secure assurance of payment, reducing the risk of non-payment and enhancing financial security by ensuring that payment is made once the terms are fulfilled.
- For Buyers: An LC from Zenith Bank ensures that payment is made only if the seller meets the agreed-upon specifications and conditions, safeguarding against the receipt of substandard goods or services.
Bills for Collection
Bills for Collection are a financial service where Zenith Bank acts as an intermediary to collect payments for shipped goods or provided services. The seller ships the goods and submits the shipping documents to Zenith Bank, which then forwards these documents to the buyer's bank for payment or acceptance.
Features
- Intermediary Role: Zenith Bank acts as an intermediary to collect payment for goods or services. The seller ships the goods and presents the shipping documents to Zenith Bank, which then forwards them to the buyer’s bank for payment or acceptance.
- Document Types: Zenith Bank facilitates both Documents Against Payment (D/P), where payment is made upon receipt of documents, and Documents Against Acceptance (D/A), where payment is made at a future date after accepting the documents.
Benefits
- For Sellers: Zenith Bank’s bill collection service reduces the risk of non-payment by ensuring that buyers cannot access shipping documents (and thus the goods) without fulfilling payment or acceptance terms.
- For Buyers: This service provides a simpler and more cost-effective alternative to LCs, facilitating easier cash flow management while ensuring that payment is made only when the terms are met.
Open Account
An Open Account is a trade arrangement where goods are shipped and delivered before payment is due, usually within a set period. This method is often used in established trade relationships and is facilitated by Zenith Bank to ensure smooth and reliable transactions.
Features
- Post-Delivery Payment: Goods are shipped and delivered before payment is due, usually within a specified period, making it a preferred method for established trade relationships.
- Credit Terms: Open Account terms are often used in strong and trustworthy business relationships where creditworthiness is well-established.
Benefits
- For Buyers: Open Account terms with Zenith Bank enhance cash flow by allowing payment after receiving the goods, which can help in managing working capital more effectively.
- For Sellers: Offering Open Account terms can help in building stronger business relationships and encouraging repeat business, though it involves higher risk as payment is not guaranteed until after delivery.
Guarantees
Guarantees are promises made by Zenith Bank to cover a specific amount in case of default by a party. They are commonly used in contracts and trade agreements to provide assurance of performance or payment.
Features
- Pre-Payment: Advance Payments involve paying for goods or services before they are delivered. Zenith Bank facilitates these transactions, ensuring secure and prompt transfer of funds to the seller.
- Secure Processing: Zenith Bank provides secure and efficient processing of advance payments, protecting against fraud and ensuring that funds are transferred as agreed.
Benefits
- For Both Parties: Zenith Bank’s guarantees provide a financial safety net that builds trust and reduces risk. They ensure that the counterparty will be compensated in the event of a default, thereby securing transactions and encouraging smoother business dealings.
Advanced payment
Advanced Payments are payments made upfront before goods or services are received. This type of payment is often used to secure orders or services and provides the seller with immediate funds to cover initial costs. Zenith Bank can facilitate these transactions to ensure both parties are protected and the process is smooth.
Requirements
- Certificate of Registration
- Form A /3&4 (Company profile)
- Certificate of Incorporation (where applicable)
- Certificate to commence business (where applicable)
- Board resolution (where applicable)
- Ghana card of business owner(s)/Signatory(ies)
- Utility bill/ Tax Receipt of business
- Initial deposit of Ghs100
- Passport picture(s) of business owner(s)
Benefits
- This is a Ghs current account for SMEs with a flat monthly COT OF Ghs100
- Customer can open FEA account in USD, GBP, EUR
- Free Internet Banking (Z-Transfer)
- Free initial Cheque Book
- Salary account set-up for employees of the business
- SME Business card
- SME business support clinics
- Opportunity to access MSME loans up to Ghs1,500,000 with up to 70% guarantee cover.
