TRADE FINANCE AFRICA

AFRICA DRAFT BILL OF EXCHANGE DISCOUNTING

DRAFT BILL OF EXCHANGE DISCOUNTING

Bill discounting is called as such because it's an arrangement whereby the seller recovers an amount of sales bill from the financial intermediaries before due date. This type of discounting generates additional working capital finance for the seller of goods.

In a export transaction, an export bill discounting means that a bank buys from the exporter the undue time draft avalosed by banks or the undue debt claim honored by banks under an export L/C, or the undue debt claim guaranteed by banks under the documentary collection.

They are two types of draft discounting: