- How do we qualify for EXIM Bank financing?
The Bank supports both onshore and offshore activities that relates to the export of Malaysian goods and services by Malaysian companies. The fundamental criteria to all our financing is that the exporter or contractor must be a Malaysian owned and controlled company except for Buyer Financing facility where the Customer shall be the foreign government or foreign companies.Does the Bank finance imports?
Yes, the Bank currently finances imports of raw materials or components which shall be processed for re-export purposes. In addition, the bank finances imports of “strategic goods” i.e goods that are unavailable in the country and high tech in nature that is crucial to the development of the countryMy suppliers want LC. Can the Bank provide them?
Yes, EXIM Bank is able to issue LC to facilitate the importation of goods.Normally, my buyers send me their LC only a week before shipment date. However, I need to buy some of the raw materials from Korea. Can the Bank give me a pre-shipment financing based on the earlier PO given by my buyers?
Yes, the Bank may consider providing advances on a case to case basis. Alternatively, the customer may secure an Export Credit Refinancing facility through the participating commercial banks under a “Certificate of performance” method. Under this facility, EXIM Bank provides advances to Participating commercial banks for a pre-shipment working capital at a specific limit based on the previous year’s annual turnover.My export value is only 50% of my total sales, so how can EXIM Bank assist in my export and local sales?
EXIM Bank’s scope of financing only caters for direct exports and indirect exports. Local sales could be financed provided that the sales are to companies which will ultimately export the respective goods. However, EXIM Bank provides insurance cover for domestic sales, to protect the exporter from payment default by the local buyers.Do you finance offshore businesses and projects?
Yes. We do finance offshore activities by offering the following financial services for both trade finance and project finance purposes: -
This facility is granted to foreign buyers, foreign lending institution and foreign government that import Malaysian goods and services.
Overseas Projects Financing
This facility is granted to Malaysian-controlled entities undertaking overseas projects in the infrastructure, industrial and commercial sectors where the payment will come from the project cashflows.
Contract Financing Facility
This facility is granted to Malaysian contractors to undertake ontract overseas such as infrastructure, manufacturing and other development projects. This facility is normally short term to medium term in nature.
This facility is granted to Malaysian companies to facilitate the issuance of bonds for overseas contract undertaken by Malaysian contractors and also to enable Malaysia investor to raise funds overseas. The Bank also provides direct guarantee facilities to assist issuance of Tender Bond, Performance Bond, Advance Payment Bond and Warranty Bond to overseas principal.
Supplier Credit Facility
A trade financing solution to meet both the pre and post shipment requirements of Malaysian exporters.
Export Services Facility
Granted to Malaysian professional services providers to assists in raising of financing and bonds for overseas contracts or development work.
Overseas Investment Financing
This facility finances the investment of Malaysian companies overseas such as purchase of property with productive capacity.
Two types of insurance facilities available for the overseas projects are the: -
Buyer Credit Guarantee
Guarantee given to financial institutions lending to offshore projects, which import Malaysian goods and services.
Bond Indemnity Support
Indemnity given to bond issuers against the unfair calling of performance bonds (issued against Malaysian contractors) by foreign state or private buyers.
- How long does it take to obtain a facility from the Bank?
What is the difference between the Buyer Credit Facility and the Overseas Project Financing Facility?
- Issuance of Letter of Support is 7 working days from the receipt by the Bank on the credit application.
- Issuance of Indicative Term Sheet is 21 working days from the date of receipt of full information by the Bank on the credit application.
- Actual finance available upon completion of all legal documentation.
The Buyer Credit Facility is a financing facility extended to foreign principals/importers of Malaysian goods and services while the Overseas Projects Financing facility is offered to Malaysian controlled companies involved in undertaking overseas projects.How does the Guarantee facility operate?
The Guarantee facility is offered as a standalone facility or packaged with other products such as Overseas Project/ Contract Financing. Financial Guarantee is also extended to Financial Institution for the financing given by the Financial Institution to its client on cross border projects. The Guarantee Facility would thus mitigate those risks which commercial lenders are not prepared to take.How does the Guarantee facility help raise the required funding compared to what the sponsors can do on their own?
The availability of the Guarantee facility would provide the project sponsors with access to funds from commercial lenders who would otherwise be reluctant to extend financing in view of the long duration of the loan as well as the country risk which the commercial lenders are not prepared to take. EXIM Bank will guarantee the commercial lenders against the default of the project sponsors.How are the Guarantee fees charged?
The Guarantee fees are charged on a flat rate based on the amount and duration of guarantee and payable upfront. It is calculated on a monthly basis.What is the Supplier Credit Facility's margin of financing?
For pre-shipment supplier credit, the Bank finance 85% of the export order while for post-shipment supplier credit, the Bank finance a maximum of 100% of the export value with LC & non LC transaction.
- What are the usual costs?
For Cross Border Credit Facilities and Project Financing Facilities, 1.0% of the financing amount. For Supplier Credit Facility, a processing fee shall be charged to the customer subject to a minimum of RM500 and a maximum of RM8,000. The fee is payable by the client upon acceptance of the Letter of Offer (LO) by the customer.
Cost of Facility
The cost of the facility are usually rendered as follows: -
How does Exim Bank assess an application?
- Loan Interest/Profit
For term loans/financing, the interests/profit are charged on a monthly, quarterly or semi-annual basis comprising Cost of Funds (COF) plus a margin of up to 3.0% per annum. If the COF is 5% and the margin applied is 3%, then the interest/profit rate chargeable will amount to 8% per annum. The COF will be based either on LIBOR, TIBOR or SIBOR.
- Guarantee Fee
For guarantees and performance bonds, the fees are charged in accordance with the risk profile of the transaction from 0.1% per month and above.
- Incidental Costs
In addition, the successful applicant will also be required to bear all legal and professional fees, traveling costs and other costs incidental to the application and provision of the facility.
Exim Bank evaluates each application by its merits, namely, by conducting due diligence on the project, corporate entities e.g. sponsor, customer, supplier/contractor, guarantors, etc., market, finance, projected profit & loss and cash flows, country analysis including its legal environment, agreements, contracts, and other matters pertinent to the project.How does EXIM compete with other Commercial banks?
EXIM Bank does not compete directly with other commercial banks. Our role as a policy bank mandated to support Malaysia’s export sector, and our product offering create a niche which allows us to pursue our own agendaDoes the Government provide any capital guarantees or Letters of Support?
No, but the Government has provided support in the past, for example the RM100 million grant provided in 2007 to strengthen EXIM Bank’s balance sheet position. The Government thinks EXIM Bank is now strong enough to stand on its own but will assist in times of need.Sources of funding?
Besides equity,EXIM Bank source its cheap funding through bilateral arrangement with other instituition, bonds and sukuk.
- Loan Interest/Profit