IDB CO - FINANCING

The short term facility is available to Malaysian exporters that exports goods to member countries of the Islamic Development Bank (IDB), or importers of Malaysian goods that export to IDB member countries.

 
Purpose
This is an arrangement between EXIM Bank of Malaysia and International Islamic Trade Finance Corporation (a member of Islamic Development Bank) of Jeddah, Saudi Arabia to ensure ‘secured payment transactions’, benefiting exporters of goods from Malaysia to IDB countries. The Malaysian exporter that exports Malaysian products to IDB member countries through Letter of Credit will get immediate payment from EXIM Bank. EXIM Bank takes the risk of the LC Issuing Bank.
Shariah Contracts / Concepts
The Shariah contract applicable to IDB CO-Financing is:
Murabahah
Eligibility
Importers/Buyers from IDB Member Countries with minimum three (3) years in business and Malaysian Exporter that exports Malaysian products. Available in two (2) schemes. Scheme 1 is for foreign importer of Malaysian goods, whilst scheme 2 is for Malaysian exporters. Detailed information can be obtained from the Product Disclosure Sheet
Minimum Financing
Scheme 1 :
USD200,000
 
Scheme 2 :
USD100,000
Tenure
Up to maximum 180 days.
Profit Rate
At LIBOR + spread.
Currency
United States Dollars, Euro and other acceptable currency.

 

Scheme 1
 
Payment
Against proceeds of the issuance/LC
Disbursement
Payable to Malaysian exporter.
Payment Method
Open Account, Letter of Credit.
Transaction Fee
NIL
Security
For Financing to Importers:
  1. Bank Guarantee
  2. Government Guarantee
  3. Islamic Insurance/Takaful/Guarantee by Export Credit Agency (ECA)
  4. Corporate Guarantee
  5. Directors’ Guarantee

 

Scheme 2
 
Payment
Reimbursement by LC Issuing Bank.
Disbursement
Payable to Malaysian exporter.
Payment Method
Usance pay at Sight LC.
Transaction Fee
USD100 per transaction
Security
For Financing to Exporters:
  1. Against proceeds of the usance/LC