Buyers’/Importers’ Credibility Assessment
During our interaction with clients at Centre for Business Information in Kenya (CBIK), the most sought assistance especially by Micro, Small and Medium Enterprises (SMEs) is how to ascertain the credibility of an export lead. Most of the time they are conned off their products and don’t receive their due payments.
Engaging in export business is challenging.  You, as an exporter, can minimise risks by finding out as much about your customer/partner as you can.

Your ability to get paid is often more dependent on your relationships than your legal rights. Determining who really controls the company, who has authority to bind the company legally, and what they have the authority to do, can sometimes be tricky, but is essential information.

Credibility is defined as the degree to which someone or something is deemed trustworthy and believable. Company’s credibility often determines success or failure of an exporter getting paid for goods or services supplied. It is important to do due diligence on potential buyers received through trade leads.

Trade leads is an important aspect of international business and is considered an inexpensive way of getting new buyers and consequently export orders. Trade leads or 'RFQ' (Request for Quote) are enquirers from unknown buyers published in public bulletin boards or B-2-B marketplaces. These export leads are certainly not export orders, though some could be converted into firm order after successful negotiation.

Those placing the leads could be serious buyers looking for serious sellers. They could also be window shoppers, arm-chair international businessmen, fraudsters or conmen populating the market. Exporters therefore, have to find out a way of sifting through the crowd in order to find a serious buyer.

You will find that trade leads are posted for variety of reasons such as:

•    Self-Advertisement - pure and simple product promotion (seller in the garb of buyer.
•    Find market price (usually to put pressure on existing supplier)
•    Find out about competitors
•    Locate alternate or additional suppliers
•    Find suppliers for new product
•    Begin negotiation for a later purchase

There are no specific rules to differentiate serious buyers from fraudster. However, common sense, observation, care and imagination can help you locate potential leads easily. Following are some tips on this regard;
•    Find Reliable and Exclusive Sources. It is far easier to cultivate a trade lead into business when they come from exclusive source, not available to million others or displayed in free bulletin boards. EPC subscribes to such exclusive sources including KOMPASS.
•    Keep a Watch for Competitors. Be suspicious of companies who ask for detailed information about manufacturers' prices, but identify themselves as distributors looking for new lines. They could be gathering information and have no intention to buy!
•    Be Careful of Large Orders. These are often small companies who issue 'RFQ' (request for quote) for large quantities in order to get a lower price. Ultimately, they order smaller quantities to 'test' the supplier, making the deal un-economic for seller.
•    Observe the Language. Do not be unduly influenced by flowery language or very specific requirement. Do not prejudge a lead, exercise normal precautions necessary in international business.
•    Check the Market. If you are not a manufacturer and you outsource products, be careful of locked market activities. The trade lead may specify a particular product and when your company contacts the manufacturer, you find out that the manufacturer already has representation in that country and will not sell directly to you for resale as they want to protect their distributor relationship.
•    Ignore trade leads offering "letter of intent" or "letter of interest".
•    Jack of all Trades. Generally ignore companies who claim to deal in all commodities traded on world markets such as coffee, sugar, urea, oil and gold. Normally, these commodities are very large deals handled by well established companies in well established markets. Such well established companies usually do not place trade leads in Internet.
•    Do not believe in overnight Success. Be cautious of international business scams designed to separate you from your money. Be suspicious of anybody who prefers phone conversations to written documents. When the deal is too good, think again!
•    Understand the Virtue of Patience. Understand that most foreign distributors do not make fast buying decisions. It is not at all unusual for an initial order to require 9-18 months from the time of the initial solicitation depending upon the cost of the item.

•    Develop Relationship. Instead of treating the leads as 'export order' with a hit or miss attitude, use the opportunity to develop lasting relationship. Understand buyers' requirements and offer solution accordingly. Do not indulge in monologue on your products; make it a dialogue on how both the companies can stand to gain from a mutual understanding.

Below are some of points to look for when doing a credibility check:-

1.    Request for comprehensive company details. Such details include;

•    Profile of importing company indicating year of start, line of business, company location (i.e. town and street)
•    Contact details (full name of contact person, title, phone, email)
•    Company website address for further details as may be necessary
•    Test if the Website provided is active

2.    Carry out a reference check of your potential buyers.

•    Ask the potential buyer to give testimonials

•    Verify their legality by asking for their business licence. This will give you the identity of the legal representative of the business the amount of registered capital and the scope of its permitted business practice. The legal representative of the company is the only individual legally entitled to bind the company.

•    Verify the credibility of a business through the Chamber of Commerce in the importing country. Most businesses are members of state, city, and regional chamber of commerce by law in most developed countries.

•    Contact the Trade Attaches based in Kenyan Missions abroad

•    Find out if the importer is a member of a Sector Association which will added advantage

3.    Googling the business' reputation. Google the name of the business you are seeking, and you will find ratings/comments on the business.

4.    Carry out credit investigation.
•    This involves engaging the services of a credit rating agency. The four big credit rating agencies are Standard & Poor's; Moody's; Dun & Bradstreet; and Fitch Ratings. There are also other local rating firms that can be approached though at a fee. The cost can range from a few hundred to a few thousand dollars depending on what is requested, the speed the report is required, the location of the company being checked and how much information is provided.

In Kenya we have Dun & Bradstreet, Metropol East Africa and African Trade Insurance.

•    Ask for banking references and request from banks all relevant banking history of their client.

•    Do not trust too much. There are times when exporters trust the buyer especially after sending the first two or three consignments and getting paid such that they find no need to confirm orders in writing and sign a contract.

After doing the above and still find that you doubt the credibility of your potential buyer;

•    Ensure that you have signed a contract before starting to supply. Each orders placed by the buyer are confirmed in writing, even if it is through e-mail.

•    You can ask for more stringent payment conditions, such as payment upon confirmation of the sale or anything that relieves you of the worry of the payment. This is particularly important if the buyer does not have the ability to open Letters of Credit.

•    If you have other contacts in the buyer's country, request them to check.

•    Exercise caution and keep your eyes wide open when you engage in the export business.


Some simple checks can be done to attempt to determine the credibility of a potential importer. When you receive an enquiry;

•    Look at the e-mail address. E-mail from public domains like gmail, hotmail, yahoo, sina, sohu, 123.com, etc often indicates a new or small company or an individual calling themselves a company, or an individual using a legal company's name. They could be fraudsters camouflaging themselves as businessmen. Look for domain addresses which are related to the name of the company e.g. if the email address is This e-mail address is being protected from spam bots, you need JavaScript enabled to view it and the company is called Abcos Limited, then that is likely to be genuine.
•    Check the company name on Google - even if the site is all in foreign language you don’t understand. That is a start.

•    Insist on the importing company providing a copy of their business licence as well as full contact details.
•    Ask for details on the company's trading history, including products and markets.
•    Ask for their experience.
•    Ask for references from other companies they have dealt with internationally.
•    Do not be afraid to ask the hard commercial questions (e.g. how will you remit the funds to me?).
•    Check the email signature. Does the sender sign emails with full names, designation, and company details? Serious people will always disclose such details without being probed.




Export Promotion Council has compiled this Information with the aim of providing support and guidance for promotion of Kenya’s Export of goods and services. The information contained in this document is restricted, legally privileged, and may be inaccurate due to policy changes from time to time. The Export Promotion Council will not accept responsibility or liability for the content, or for the consequences of any actions taken on the basis of the information provided therein.


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