Post-shipment finance is a critical tool in international trade, allowing exporters to access funds immediately after shipment, bridging the gap between shipment and payment receipt. It mitigates cash flow challenges and is governed by international standards such as the Uniform Customs and Practice for Documentary Credits (UCP 600) for letters of credit and Uniform Rules for Collections (URC 522) for collections. In the Ghanaian context, banks like Ecobank Ghana or GCB Bank often provide these facilities, ensuring compliance with Bank of Ghana (BoG) regulations on foreign exchange and credit risk management, including the Foreign Exchange Act, 2006 (Act 723). These products can be with recourse (exporter liable if buyer defaults) or without recourse (bank assumes risk, often at higher cost). Below, I explain each product briefly, drawing on practical applications.

A. Export Bill Negotiation
Export bill negotiation involves the exporter’s bank purchasing or advancing funds against export bills (drafts or documents) under a documentary letter of credit (LC). The exporter presents compliant documents to their bank, which “negotiates” them by paying the exporter immediately, less fees and interest, and then seeks reimbursement from the issuing bank. This is typically without recourse if documents conform to UCP 600 standards. In practice, for a Ghanaian exporter shipping cocoa to Europe under an LC, the bank (e.g., Stanbic Bank Ghana) advances up to 90% of the bill value post-shipment, helping manage working capital. Risks include document discrepancies, but it provides quick liquidity. Key benefit: Transfers payment risk to the bank.

B. Export Bill Discounted
Export bill discounting refers to the bank advancing funds to the exporter by discounting (purchasing at a discount) the export bill of exchange, usually under a usance (time) draft where payment is deferred. The bank deducts interest and charges from the face value and credits the exporter’s account. This can be with or without recourse; without recourse is common if backed by credit insurance like that from the Ghana Export-Import Bank (GEXIM). For instance, a Ghanaian textile exporter with a 90-day usance bill can discount it at their bank to fund next production cycles. In Ghana, BoG guidelines ensure such facilities align with anti-money laundering rules under the Anti-Money Laundering Act, 2020 (Act 1044). It suits non-LC transactions but exposes the bank to buyer default if with recourse.

C. Advance against Banker’s Acceptance
This involves the bank providing an advance to the exporter against a banker’s acceptance, where the importer’s bank accepts a time draft, guaranteeing payment at maturity. The exporter can then obtain finance from their bank by pledging this accepted draft. It’s often without recourse to the exporter, as the acceptance shifts risk to the accepting bank. Practically, in cross-border trade like Ghanaian gold exports, the exporter might receive an advance of 80-95% of the draft value, repayable upon maturity. This aligns with Basel III-adapted BoG capital requirements, where banks assess counterparty risk. It’s useful for deferred payments, reducing exporter’s holding period, but requires strong correspondent banking relationships, such as with international banks like Barclays for acceptance confirmation.

D. Advance against an Export Bill sent for Collection
Here, the exporter’s bank advances funds against export bills sent for collection (clean or documentary) under URC 522, where documents are forwarded to the importer’s bank for payment or acceptance. The advance is typically with recourse, meaning the exporter repays if the buyer rejects or defaults. For example, a Ghanaian importer of machinery might use this for open account trades; the bank advances partial value post-shipment while awaiting collection proceeds. In Ghana, this is common for intra-African trade under the African Continental Free Trade Area (AfCFTA), with banks like Access Bank Ghana managing risks via status enquiries on buyers. Precautions include collateral or insurance, and it’s cost-effective for trusted buyers but carries higher default risk compared to LC-based options