Stanbic Bank Kenya and Industrial Commercial Bank of China (ICBC) have partnered with Chinese Trade Agent Zhejiang International Trading Supply Chain Co. Ltd (Guomao) to launch the Africa China Agent Proposition (ACAP) initiative.
The initiative which has been launched in different parts of Africa aims to assist African importers source and validate quality goods, safely and efficiently, from the most competitive suppliers in China.
The ACAP offering is expected to revolutionize African importers’ view of China’s supplier universe. It will also ease the cash flow of African importers by providing access to financing while empowering importers with sight and control of the entire importing and logistics process.
It was initially launched in Nigeria and Ghana in May 2019 with roll out to South Africa and Kenya following.
Currently African importers order from only a handful of trusted Chinese suppliers. This limits the negotiating power of African importers while stacking the terms of trade against them. While ordering online provides access to a wider range of suppliers, online imports cannot guarantee the quality of goods.
In most cases too, advance payments for goods are required. This is often demanded in cash, without reciprocal guarantees of delivery or quality. This means that African importers often carry a disproportionate burden of risk in most transactions. Language and cultural barriers are also a challenge for African importers when traveling and negotiating supplier agreements in China.
In response to these challenges, and in light of the vast opportunity that China presents as a trading partner, Standard Bank, the biggest bank in Africa, has leveraged its partnership with the Industrial and Commercial Banka of China (ICBC), the biggest bank on the world, to connect African importers with a dedicated trade agent in China.
Stanbic Bank Kenya’s Chief Finance Officer, Abraham Ongenge acknowledged the role China and Kenya play in expanding each other’s economic capacity.
“Stanbic Bank Kenya is committed to driving Kenya’s growth. This strategic trade partnership we believe will unlock the potential of this key sector to benefit the economy in the long-term. This illustrates our wholesome approach towards driving Kenya’s sustained growth because it is our home,” said Mr. Ongenge.
The ACAP offering is underpinned by a letter of credit, which will deepen trust in Africa-China trade relationships, guaranteeing African importers access to the best suppliers in China, the best payment terms and the best quality. If any of the terms of the letter of credit are not met, payment will not be made.