For Somalia, when an exporter has concluded a commercial export contract with a Somalian importer and the two parties do not know each other, the irrevocable and confirmed letter of credit is the most appropriate instrument to mitigate the risks.
The Somalian importer will ask the Somalian bank to issue a letter of credit for the benefit of the exporter who will have previously named the name of the notifying and confirming bank to be accepted by the exporter.
For Somalia, the exporter must choose a confirming bank that has in its network of correspondents the Somalian bank that is proposed by the importer but also the one that has an acceptable credit rating so that there is no default of payment from the confirming bank.
A letter of credit issued in Somalia is usually confirmed by a big number of banks which are prepared to take the risks of Somalian banks and make sure the beneficiary of the LC or exporter obtain his payment.
LIST OF SOMALIAN BANKS ISSUING LETTERS OF CREDIT AND WHICH ARE ACCEPTED BY THE BANKS OF EXPORTERS
Central Bank of Somalia
Al Barakaat Bank
Commercial and Savings Bank of Somalia
Somali Commercial Bank
Universal Bank of Somalia
First Somali Bank
Salaam Somali Bank
CONFIRMING BANKS FOR LETTER OF CREDIT ISSUED THROUGH SOMALIAN BANKS
Banks which are confirm the letters of credit issued in Somalia by Somalian banks are: (please contact us to obtain the list or to be listed as confirming bank).
SOMALIA: CONFIRMATION FEE FOR LETTER OF CREDIT FROM A SOMALIAN BANK
Confirmation charges and fees for letters of credit issued through Somalian banks can be obtained on demand by emailing: email@example.com.
TRADEFINANCE.AFRICA COUNTRIES OF EXPERTISE