Uganda's trading community is increasingly seeing letters of credit (L/Cs) as a useful method of financing, according to a local consultant.

Executive director of the Coronet Group, Christian Baine, reckons the increased L/C awareness is in line with an increasingly dynamic and sophisticated business environment in Uganda.

Business evolution

Baine reckons the business environment in Uganda has evolved substantially over the last three years.

He says this is because development policies have encouraged business people to take advantage of the opportunities presented by globalisation and the East African Community.

Trade finance

However, Baine reckons these policies have until recently been hampered by a lack of adequate trade finance, particularly for small- and medium-sized enterprises.

Now he reckons financial institutions are becoming more and more flexible. "Nowadays it is not uncommon for a bank to issue L/Cs," he told local media.

Baine also sees wider availability of and lower costs for other trade finance services, including insurance or guarantees.

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