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Categories
| Maybank Islamic targets RM750m loans from two new Islamic facilities |
| Business & Market 2009 | |||
| Written by The Edge Financial Daily | |||
| Wednesday, 01 July 2009 21:10 | |||
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In a statement today, Maybank Islamic said both facilities, which are specifically for businesses, were designed for asset acquisitions and refinancing of assets such as landed properties, plant and machinery, vessels and commercial vehicles. CMTF-i can also be packaged for working capital and corporate purposes. "CMTF-i and MTF-i therefore offer significant advantages to business customers. We are targeting for both facilities to significantly contribute to our 10%-15% growth target in Maybank Islamic's overall financing portfolio for the next financial year," said Maybank Islamic acting CEO Ibrahim Hassan. He said that to date, Maybank Islamic had more than RM7.9 billion in outstanding financing to the business sector. "The launch of these two products given the current challenges is part of Maybank's commitment to provide continuous access of financing to viable local SMEs, as well as to support the government's various initiatives to ensure sustainability and growth of businesses during this period," said Ibrahim. For CMTF-i, a specific commodity will be identified and used as an underlying asset for the sale and purchase transaction between bank and the customer. The bank buys the commodity at cost and sells it to the customer at cost plus profit. The customer will pay the financing amount and the profit to the bank on a deferred payment basis. The purchase and sale of the commodity by the customer is done simultaneously. As a result, both the customer and the bank are not subjected to any price and inventory risks. The purchase and sale transactions of commodity between the bank, the customer and the commodity traders are one of the methods used in Islamic banking to facilitate the provision of financing to the customers. Ibrahim said the two new facilities complemented its existing Term Financing-i as an alternative for customers to manage their asset acquisitions and refinancing. He said CMTF-i and MTF-i adopted the concept of murabahah, which is a widely accepted global Islamic concept especially by Gulf Cooperation Council Islamic banks. "Customers now have the alternative to choose the underlying asset used when applying for term financing," he added. Currently, the commodities that are used for CMTF-i are tradable syariah-compliant commodities such as zinc, tin, lead, palm oil and wheat. CMTF-i is also available in foreign currencies denominations, giving more flexibility to the customers for their domestic and international business operations. Another method used in providing financing to customers for purchase and refinancing of assets is via MTF-i. The underlying asset used for the sale and purchase transaction is the asset to be purchased or the customer's own asset identified for refinancing.
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