DS-Concept says it has recently completed its first advance payment for assigned letter of credit (L/C) proceeds in Bangladesh.

The German-based trade finance specialist reckons the new product will enable Bangladeshi exporters to turn their deferred L/Cs into cash more easily.

Deferred preference

According to senior executive vice president of DS-Concept Factoring, Rene Pastor, more foreign buyers have recently preferred to open deferred L/Cs instead of sight L/Cs when buying from Bangladesh.

Pastor also argues that Bangladeshi exporters are in need of liquidity and cannot wait three or four months for payment.

Client approval

Under an arrangement with Mutual Trust Bank Ltd in Dhaka, DS-Concept is now able to arrange deferred L/Cs for buyers while exporters are paid sooner than under conventional deferred L/C terms. Essentially, DS-Concept says it turns deferred L/Cs into sight L/Cs.

The concept has apparently won the approval of several new clients, including a Chinese textile manufacturer that exports to Bengali textiles mills which has already signed for the new service according to DS-Concept.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.