TRADE CREDIT TAKAFUL

Malaysian traders and manufacturers should not hesitate to explore international markets to have a competitive/advantage. Trade Credit Takaful (TCT) from EXIM Bank assures your future payments for export/sales of goods or services, either from your overseas/local buyers or from EXIM Bank by way of Takaful.

There are three types of Trade Credit Takaful cover:

  • Export
  • Domestic
  • Import
Detailed information can be obtained from the Product Disclosure Sheet
 
Export
 
Shariah Contracts
The Shariah contract applicable to Trade Credit Takaful is Wakalah-Mudarabah
Purpose
To insure the risk of non-payment by Overseas Buyers.
Risk Covered
COMMERCIAL RISKS
  1. Buyer’s insolvency
  2. Buyer’s payment default
  3. Buyer’s failure to accept goods
POLITICAL & COUNTRY RISKS
  1. Blockage or delay in the transfer of payment
  2. Imposition of import license
  3. Cancellation of import license
  4. War between Buyer’s country and Malaysia
  5. War, revolution and civil disturbances in the Buyer’s country
  6. Default by Government Buyer
Percentage of Cover
Up to 90% for commercial risks and 95% for political and country risks.
Payment Terms
Irrevocable Letter of Credit (ILC), Documents Against Payment (DP), Documents Against Acceptance (DA) and Open Account (OA).
Period of Cover
Credit terms of up to 180 days
Contribution Rate
Contribution rate is determined based on:
  1. Terms of payment
  2. Market Grading
  3. Trading and Claim experience
  4. Whole turnover or selective Policy
Eligible Participant
  1. Malaysian-incorporated companies registered under the Companies Act 1965, inclusive of Banks and other Financial Institutions, e.g factoring companies.
  2. The exporter must indulge in the export business. There shall be no minimum volume.
  3. Minimum of two (2) years in operation.
  4. No adverse track record in the credit database.
  5. Minimum paid-up capital of RM100, 000.
  6. Evidence of export during the previous 12 months
Eligible Buyer
To be assessed by the Insurance Underwriting Department
Fee and Charges
  1. CLA fees (Pre-Checking): RM250 per buyer
  2. CLA fees: RM250 per buyer
  3. Annual Review of Buyer : RM250
Certificate Period
The Certificate is issued for 12 months and is renewable on a yearly basis
Commencement of Cover
Risk exposure commences when the goods are shipped to overseas Buyers.
Claim Payment
Causes of Loss & Claims Waiting Period
  1. Buyer’s insolvency
    Immediately
  2. Default in payment
    Six (6) months after due date of payment
  3. Non-acceptance of goods
    One (1) month after goods are resold
  4. Transfer delay
    Four (4) months after deposited payment in selected currency
  5. Others
    Four (4) months after date of occurrence
Tax Relief
In respect of TCT contribution paid, participant is eligible for double deduction tax relief under Section 33 of the Income Tax 1967. Tax Certificate will be issued within one (1) month of the participant financial year-end.

 

Domestic
 
Shariah Contracts
The Shariah contract applicable to Trade Credit Takaful is Wakalah-Mudarabah
Purpose
To insure the risk of non-payment by Domestic Buyers.
Risk Covered
COMMERCIAL RISKS
  1. Buyer/Issuing Bank’s insolvency
  2. Payment default
Percentage of Cover
Up to 90% of loss suffered
Payment Terms
Irrevocable Letter of Credit (ILC), Documents Against Payment (DP), Documents Against Acceptance (DA) and Open Account (OA).
Period of Cover
Credit terms of up to 180 days
Contribution Rate
Contribution rate is determined based on:
  1. Terms of payment
  2. Trading and Claim experience
  3. Whole turnover or selective Policy
Eligible Participant
  1. Malaysian-incorporated companies registered under the Companies Act 1965, inclusive of Banks and other Financial Institutions, e.g factoring companies.
  2. The exporter must indulge in the export business. There shall be no minimum volume.
  3. Minimum of two (2) years in operation.
  4. No adverse track record in the credit database.
  5. Minimum paid up capital of RM100, 000.
  6. Evidence of export during the previous 12 months
Eligible Buyer
  1. Malaysian companies registered under the Companies Act 1965, inclusive of Non-Resident Controlled Companies
  2. The buyer must have a paid-up capital of at least a minimum of RM100, 000
  3. At least three (3) years in business operation
  4. Minimum sale of RM1.0 million
  5. No adverse track record
Fee and Charges
  1. CLA fees: RM50 per buyer
  2. Annual Review of Buyer: RM50
Certificate Period
The Certificate is issued for 12 months and is renewable on a yearly basis.
Commencement of Cover
Risk exposure commences upon the acceptance of the goods by Domestic Buyers.
Claim Payment
Causes of Loss & Claims Waiting Period
  1. Buyer’s insolvency
    Immediately
  2. Default in payment
    Six (6) months after the due date of payment
  3. Non-acceptance of goods
    N/A
  4. Transfer delay
    N/A
  5. Others
    N/A
Tax Relief
In respect of TCT contribution paid, participant is eligible for double deduction tax relief under Section 33 of the Income Tax 1967. Tax Certificate will be issued within one (1) month of the participant financial year-end.

 

Import
 
Shariah Contracts
The Shariah contract applicable to Trade Credit Takaful is Wakalah-Mudarabah
Purpose
To insure the risk of default or non-payment by Domestic Buyers, arising from import trade transactions of strategic goods
Risk Covered
COMMERCIAL RISKS
  1. Buyer/Issuing Bank’s insolvency
  2. Payment default
Percentage of Cover
Up to 90% of loss suffered
Payment Terms
Irrevocable Letter of Credit (ILC), Documents Against Payment (DP), Documents Against Acceptance (DA) and Open Account (OA).
Period of Cover
Credit terms of up to 180 days
Contribution Rate
Contribution rate is determined based on:
  1. Terms of payment
  2. Trading and Claim experience
  3. Whole turnover or selective Policy
Eligible Participant
Malaysian-incorporated companies registered under the Companies Act 1965  that are a Direct Exporter or Direct Importer.
Eligible Buyer
  1. Malaysian companies registered under the Companies Act 1965, inclusive of Non-Resident Controlled Companies
  2. The buyer must have at least a paid-up capital of a minimum of RM100, 000
  3. At least three (3) years in business operation
  4. Minimum sale of RM1.0 million
  5. No adverse track record
Fee and Charges
  1. CLA fees: RM50 per buyer
  2. Annual Review of Buyer: RM50
Certificate Period
The Certificate is issued for 12 months and is renewable on a yearly basis.
Commencement of Cover
Risk exposure commences upon the acceptance of the goods to Domestic Buyers
Claim Payment
Causes of Loss & Claims Waiting Period
  1. Buyer’s insolvency
    Immediately
  2. Default in payment
    Six (6) months after due date of payment
  3. Non-acceptance of goods
    N/A
  4. Transfer delay
    N/A
  5. Others
    N/A
Tax Relief
In respect of TCT contribution paid, participant is eligible for double deduction tax relief under Section 33 of the Income Tax 1967. Tax Certificate will be issued within one (1) month of the participant financial year-end.