Frequently Asked Questions
We will need first time clients to scan the following documents copies to us:
- Memorandum and articles of association
- IDs and PINs of Directors
- City Council License
You can fill in a one page application for and a counter guarantee attached then scan the documents back to us. It is always advisable to call after 15 minutes if you do not get a response.
The documents constitute a KYC package that is a mandatory requirement for any financial services company to maintain statutory documents of their customers. They are asked once only.
The premium depends on the amount and the number of days, but further details will be discussed once we get your completed application.
It takes a maximum of 1 hour upon receipt of a completed application. A completed application constitutes a fully filled application and payment of the applicable premiums. We will only process an application whose premiums have been paid in full, unless we have other arrangements with the applicant.
We accept Cheque, Cash or Mpesa.
Under normal terms, it’s a same day service or 2 days worst case scenario. Either way, we will communicate to you within the same day whether we will proceed with the transaction or not. Also, it depends on the client’s speed in availing the required documents/information as and when needed
Performance bonds usually carry a risk: that of performing the awarded task as per the specifications of the employer. In case something goes wrong either because of commission or omission by the contractor/supplier, the employer will usually ask our bank to pay them the performance bond amount. That means that the performance guarantee crystallizes. This also means that the bank will directly debit our account with the full amount of the performance guarantee. Due to this fact, there is always a requirement of risk participation. We say that if you have nothing to loose in the transaction, you have nothing to protect. This cash margin serves as security on condition that we have done intensive evaluation and are comfortable with the contractor’s ability to perform, as well as ability to amass enough resources to discharge the performance obligation. The other balance of the performance bond amount is covered either through our portfolio cover, or an acceptable asset. We could also have a combination of cash margin, bonds and indemnity insurance and an asset or simply, cash margin and bonds and indemnity insurance.
According to IFRS 9, guarantees and letters of credit are classified as contingent liabilities. Contingent liabilities are off – balance sheet items and appear as memorandum items to determine the sundry assets or liabilities. When any of our bank issues a bank guarantee such as a performance bond, the bank does a provision for it in their books as a protective mechanism in the event that the facility crystallizes. Since we do not ask clients to put in 100% cash margin, it is now industry practice for the bank to provision for bad debt in the event the facility crystallizes in the future. We are different in the sense that if our client agrees to put in 100%, we can secure a fixed deposit arrangement that is interest earnings subject to other terms and conditions to be discussed with the client. Therefore unless the client places 100% cash margin, there is no interest that will be earned.
This is a frequent question and a genuine concern. When government ministries and departments request that your tender should be accompanied by a tender security in form of a bank guarantee from a reputable commercial bank in Kenya, they know exactly what they mean. Truth be told, there are banks that have suffered reputational risk either because of commission or omission; and these kind of instances affect that particular bank a great deal. Banks are formed based on Trust and Integrity, therefore, procuring entities will usually insist that the tender securities should come from banks that are reputable in their view. These are very small clauses that are inside the tender document which tenderers usually ignore; but which come to roost them unknowingly as procuring entities will not under any circumstances communicate that they rejected your tender because you brought a bid security from a bank they were not comfortable with. Else, they would be sued for defamation with very dire consequences. At Ableways, we are very careful about the banks we engage and do business with because those banks have to meet certain expectations; and we have defined in our company terms and conditions; the substandard minimum expectations that any of our banking partners should meet; to facilitate cordial relationships. Therefore we are extremely careful about who to engage with and for what; but this should not be construed to mean that most of those banks that we do not work with are not reputable. Some of them have very high security requirements which would not be friendly to us or our clients, whilst some of them because of their policies and procedures we cannot meet their bar. We understand our position and our customers well enough to know that there are far many good banks in Kenya that we cannot meet their expectations; as there are few banks that do not meet our expectations as well. Talk to us, we will walk with you shoulder to shoulder to your success.