Why the Buyer Required Documentary Credit?
Nigeria is the fourth-largest fish importer in the world. Frozen fish varieties such as mackerel, shawa, horse mackerel, and more are widely consumed in Nigeria. Knowing the demand for frozen fish, a Nigerian trader decided to import fish from China and supply different varieties to the local market. To support the import, the buyer needed a secure payment method, so the parties agreed to use a Letter of Credit.
Buyer Needs to Avail Documentary Credit
To open a Letter of Credit on their behalf, the buyer visited their bank with the LC request. However, due to strict banking requirements, they faced difficulties in arranging the Import LC. With the help of a local trade finance expert in Nigeria, the buyer got in touch with us. They then shared their trade details and requested our assistance in opening a Letter of Credit.
How the Buyer Got Documentary Credit from Us?
We arranged a meeting with the client over Zoom to understand their requirements and explain our services. After the client came to our office in Dubai, we reviewed the trade documents and discussed the transaction in detail. Once the required formalities were completed, we structured the DLC MT700 draft for the client’s review. After receiving approval, we instructed our bank to issue the Letter of Credit through the appropriate banking channel in favour of the supplier.
Outcome!
The bank issued the DLC via SWIFT MT700 to the supplier’s bank on the same day. With the Import LC in place, the frozen fish deal between the Nigerian buyer and Chinese supplier was successfully concluded.
