Payment security
The seller is paid once compliant documents are presented, reducing default risk.
Trade Finance Support
Letter of Credit (LC) Assistance
We help Kenyan importers and exporters get the documentation and shipping side of a Letter of Credit right — so payments are released on time and cargo clears without delay.
The basics
What is a Letter of Credit?
A Letter of Credit is a written undertaking issued by a bank on behalf of a buyer, promising to pay the seller a specified amount once the seller presents documents that comply exactly with the terms of the credit.
In practice, the LC replaces the buyer's credit risk with the bank's. The seller ships knowing the bank will pay against compliant documents, and the buyer knows the bank will only pay once proof of shipment and the agreed certificates exist.
Businesses use LCs when trading with new overseas suppliers, when order values are high, when regulations require it, or when a supplier will not release goods on open account terms.
Where FRANTO LOGISTICS LIMITED fits in
- Reviewing LC shipping and document clauses before you accept them
- Ensuring the bill of lading and invoice match the LC exactly
- Coordinating inspection, origin and conformity certificates
- Booking freight that meets the latest shipment date
- Clearing the cargo once documents are released by the bank
Benefits
Why businesses use Letters of Credit
Buyer protection
Funds are only released against the shipping documents agreed in the LC terms.
Access to new suppliers
New overseas suppliers will trade with you when a reputable bank guarantees payment.
Better trade terms
LCs often unlock larger order volumes and improved supplier pricing.
Structured documentation
Everyone works to one agreed document set, reducing disputes.
Financing options
LCs can be paired with trade finance facilities to protect cash flow.
Documents
Documents typically required
- LC application form from your bank
- Proforma invoice or sales contract
- Commercial invoice
- Packing list
- Bill of Lading or Airway Bill
- Certificate of Origin
- Inspection / Certificate of Conformity
- Insurance certificate (for CIF terms)
- Beneficiary's draft or bill of exchange
Process
From application to payment
- 1Sales contract agreedBuyer and seller agree price, Incoterms, shipping dates and the documents required.
- 2LC applicationThe buyer applies to their bank (the issuing bank) with the contract and application form.
- 3LC issued and advisedThe issuing bank issues the LC and advises it to the seller through their bank.
- 4Seller reviews termsThe seller confirms every LC condition can be met before shipping. Amendments are made here.
- 5Shipment and documentsGoods are shipped and the seller prepares the exact document set required by the LC.
- 6Document presentationDocuments are presented to the bank within the presentation period stated in the LC.
- 7Examination and paymentIf documents are compliant, the bank pays the seller and releases documents to the buyer.
- 8Cargo clearanceThe buyer uses the released documents to clear the cargo — this is where Franto steps in.
Watch out
Common mistakes to avoid
- Accepting LC terms that your supplier cannot realistically meet.
- Missing the latest shipment date or the document presentation deadline.
- Inconsistent details between the invoice, bill of lading and LC (names, quantities, descriptions).
- Ignoring required certificates such as CoC, Certificate of Origin or inspection reports.
- Failing to check bank charges, confirmation costs and who pays them.
- Not planning the customs clearance documents that follow LC settlement.
Trade finance through DTB Bank
For the issuance of Letters of Credit and other trade finance facilities, we encourage clients to speak with Diamond Trust Bank (DTB), which offers established trade finance services for Kenyan importers and exporters including import LCs, export LCs, bank guarantees and documentary collections.
FRANTO LOGISTICS LIMITED works alongside your bank: we guide you through the documentation and shipping requirements associated with Letters of Credit, make sure your transport documents match the credit terms, and handle clearance once the documents are released.
Disclaimer: FRANTO LOGISTICS LIMITED is a clearing and forwarding company, not a financial institution. We do not issue, confirm or approve Letters of Credit. Final approval and issuance of any LC is handled solely by the client's chosen bank, subject to that bank's terms, credit assessment and regulatory requirements. Nothing on this page constitutes financial or legal advice.