KFH: Growth of local and foreign trade finance transactions
Kuwait Finance House (KFH) Executive Director – Commercial Finance Rashed Almelhem said the bank’s efforts to continue to provide letter of credit services and appropriate funding channels and its experience as a mediator between supplier and buyer, resulted in remarkable growth in LC values related to domestic and foreign trade in 2020 and the first half of the current year.
AlMelhem said in a press release that KFH, keen to support business activities, enterprises and SMEs, has not stopped providing its services and innovative solutions under the exceptional circumstances of the past year.
He reiterated KFH’s concern to implement the latest IT applications within the trade finance department regarding the opening of LCs and LGs to facilitate procedures and enable customers to reach anywhere in the world. by providing a vast network of correspondent banks through very sophisticated communication systems.
AlMelhem mentioned that KFH has recently achieved remarkable success in launching the SWIFT Payment Controls service under the highest security and quality standards. This service allows the bank to perform real-time monitoring of the financial transfer flow directly with the benefit of notification and the ability to stop transferred payments and provide the user with daily reports on the transaction status.
On the other hand, AlMelhem pointed out that KFH has a long experience in offering innovative solutions and alternatives to finance foreign trade through LC and Sharia-compliant finance solutions, thus overcoming several challenges encountered. through the process of trade exchange.
He added that “to ensure the achievement of efficient performance, efficient solutions, speed and satisfaction of customer’s business requirements, safety of goods, speed of timely trade, the KFH’s trade finance department team includes highly qualified and trained staff with certificate accreditations in all areas of trade finance operations ”.
KFH has continued to offer and develop financing channels to meet customer needs and provide parallel business relationships. AlMelhem stated that KFH has provided a variety of products to support import / export activity including LC on sight which provides a safety factor for traders when importing their goods from overseas or when they get the supply within Kuwait and LC (on acceptance) which is a type of deferred payment credit. Payment to the foreign supplier is postponed after shipment of the goods or receipt of freight documents at certain agreed intervals. In addition, it includes Murabaha refinanced credits whereby the goods are imported into the customer’s account. When the merchandise arrives, the customer can buy it from KFH for a certain profit and adjust the value in flexible installments according to the customer’s cash flow. In addition, KFH provides the product of export credits which helps in the activation of foreign export and supports local products. Export credit is granted or endorsed in favor of the exporter in Kuwait upon instruction from the importer outside of Kuwait and receipt of the value after fulfilling the specifications of the exported merchandise.
Regarding letters of guarantee, the bank issues different types of guarantees depending on the nature of each project, initial guarantees or performance guarantees, maintenance contracts, down payment, L / G concerning the financial guarantee of the workforce of the company as well as telephone installations or trips abroad for individuals. The bank provides the LC service (on collection) and acts as a mediator who delivers the documents relating to Kuwaiti individuals or local establishments to the client according to the instructions of the foreign parties.