A Standby Letter of Credit (SBLC) is a bank’s commitment of payment to a third party in the event that the Banks’s client defaults on an agreement. It is a ‘standby’ agreement because the bank will have to pay only in a worst-case scenario.

A SBLC can be used to improve up the project financing structure bringing it to a bankability stage, to drawn down a loan or simply to trigger a credit line from the Bank or about import-export trade it is used to guarantee the supplier in the commercial transaction.