Home > Facilities > Credit Insurance > Multi Currency Trade Financing Scheme (MCTF)
Facility that benefits the Small and Medium Enterprises (SMEs)
Export-Import Bank of Malaysia Berhad, and the commercial and Islamic banks have worked together to bring to you an innovative product, known as the Multi Currency Trade Financing (MCTF).
MCTF is a facility granted to the SMEs to obtain working capital financing from the banks without the need to furnish any collateral. All transactions under this facility are to be with the Letter of Credit issued by the overseas buyers
Multi Currancy Trade Financing (MCTF)
MCTF is a facility provided by the participating banks to the SME exporters to finance the production of goods and/or rendering of services against Irrevocable Letters of Credit (ILCs) issued by the overseas Issuing Banks. The Insurance Policy provided by EXIM protects the bank against:
Pre-shipment
Non-payment by the Exporter for credits and/or advances granted against export Irrevocable Letters of Credit due to the insolvency of the Exporter.
Post-shipment
Non-Honouring of the Irrevocable Letters of Credit (NHLC) by the overseas Issuing Bank without recourse to the Exporter.
Objectives of MCTF
To facilitate the exports of Malaysian goods and/or services overseas, in particular, to the G-15, OIC and ASEAN countries.
To enable Malaysian SME exporters access to Pre and Post-Shipment working capital trade financing facility from banks without any collateral.
Benefits of MCTF
Attractive financing costs including EXIM Bank’s premium.
Nominal Stamp Duty at RM10 for loan documents.
Lower legal costs at 10% of solicitors scaled fees or RM500, whichever is higher.
Fast track approval.
Standard documents including application forms, Letter of Offer, Facility Agreement and so on.
SME’s defined by the National SME Development Council as follows:
Sector
Number of Employees
Annual sales Turnover
Manufacturing (including agro-based as well as manufacturing related services
Broad: 150 or less
Micro: less than 5
Small: between 5 and 50
Medium: between 51 and 150
RM25M or less
Less than RM250,000
Between RM250,000 and RM10M
Between RM10M and RM25M
Primary Agriculture
Broad: 50 or less
Micro: less than 5
Small: between 5 and 19
Medium: between 20 and 50
RM5M or less
Less than RM200,000
Between RM200,000 and RM1M
Between RM1M and RM5M
Services (including ICT)
Excluding manufacturing related services
Broad: 50 or less
Micro: less than 5
Small: between 5 and 19
Medium: between 20 and 50
RM5M or less
Less than RM200,000
Between RM200,000 and RM1M
Between RM1M and RM5M
Companies incorporated in Malaysia under Companies Act 1965
Non-Resident Controlled Companies (NRCC)
Sole Proprietorship and Partnership
Manufactures, Agriculture Producers, Services Providers and Traders
Pre-Shipment
Post-Shipment-Non-Honouring of Irrevocable Letters of Credit (NHLC)
Purpose
Purchasing and/or manufacturing and/or processing and/or packing of goods
Rendering of services
Facilitating exports by way of discounting/Purchasing/ negotiation of export Letters of Credit, stand-by letters of credit or such other instrument.
Rendering of services
Max. financing period
120 days
180 days
Max. percentage of financing
90% of ILC value
In the case of manufacturing, 30% (of 90%) would be disbursed to exporter and the remaining 20% (of 90%) would be disbursed to the suppliers.
In the case of agriculture producers , 80% (of 90%) would be disbursed to the exporter and the remaining 20% (of 90%) would be disbursed to the suppliers.
100% of ILC value
Percentage of cover
75% of bank’s loss
100% of bank’s loss
Max. Financing Amount
RM10 million per Exporter or equivalent in foreign currency
RM10 million per Exporter or equivalent in foreign currency
Financing Currency
Ringgit Malaysia (RM) and /or major foreign currencies
Ringgit Malaysia (RM) and /or major foreign currencies
Security
Nil
Nil
Credit Support
Directors’ joint several guarantee and Holding Company Corporate Guarantee
Directors’ joint several guarantee and Holding Company Corporate Guarantee
Method of Financing
Advanced to the Exporter against presentation of an export LC to the MCTF participating bank
Upon accepting documents by overseas Issuing Bank, the MCTF participating bank will discount the export bills to be financed and use the proceeds to liquidate any outstanding amount under the MCTF facility. The balance of the proceeds (if any) will be paid to the Exporter.
What are the premium rates and other charges payable?
Pre-Shipment
Post-Shipment (NHLC)
Premium : 0.18% per month or part thereof on transactional basis
Premium : Depends on country schedule -ranges between 0.05% per month or part thereof to 0.15% per month or part thereof
Interest: COF /ECOF + 2.00% per annum (maximum margin)
Interest: ECOF + 2.00% per annum (maximum margin)
Standard Bank charges
Standard Bank charges
If you are an exporter, whether involved in manufacturing , trading, agriculture/primary industries or services, and you satisfy the following requirements, you are eligible to apply*:
Minimum paid-up/proprietorship capital of RM50,000
In business for 6 months and above
No adverse credit record
Good profitability record
Sources goods and/or services from Malaysia
*Approval is subject to satisfactory evaluation of Exporter and Issuing Banks risks
Can the MCTF participating bank elect to cover pre-shipment MCTF or NHLC cover under the scheme?
The MCTF participating bank can choose to take up NHLC cover on a stand-alone basis. However, the bank is not allowed to cover pre-shipment MCTFon a stand-alone basis For more information on this scheme you may contract the Multi-Currency Trade Finance (MCTF) participating banks as follows:
Export-Import Bank of Malaysia Berhad, and the commercial and Islamic banks have worked together to bring to you an innovative product, known as the Multi Currency Trade Financing (MCTF).
