Maybank Islamic Berhad (MIB) has launched a special shariah-compliant trade finance solution named collateral management arrangement-i (CMA-i). According to the bank, this is a tailor-made financing solution for middle-market and corporate customers who are involved with commodity-based products.
CMA-i entails a tri-partite agreement between the bank, customer and a collateral manager who controls and manages the commodities to be financed by the bank. The arrangement is customised to finance the various stages of a commodity trade transaction cycle and is secured against the control/rights over the commodity by the bank. The risk evaluation by the bank would be more focused on the collateral valuation of the commodity instead of just the customer's financials and track record.
Financing available under CMA-i includes Islamic trade finance products such as accepted bills-i and trust receipts-i.
According to executive vice-president of Maybank Islamic, Ibrahim Hassan, the introduction of CMA-i marks a milestone in the bank's product offering.
"As a leader in Islamic trade financing, with a market share of 38.8% as of June 09, Maybank Islamic is committed to introducing a diverse range of financing solutions for our trade customers," he says. "We currently offer approximately 30 trade financing products and with this new product, we are targeting to see our Islamic trade finance volume grow by around 10% this year."
Ibrahim says the commodities that can be securitised and financed under this arrangement include steel, copper, aluminium, nickel, zinc, tin, crude oil, gasoline and others acceptable to the bank.
CMA-i not only covers commodities that are produced in Malaysia for export or distribution in local markets, but also those that are imported into the country. The commodities can either be in the form of raw materials, semi-finished products or finished products.
Maybank Islamic has also introduced Commercial Industrial Hire Purchase (CIHP) based on the shariah contract Al-Ijarah Thumma Al-Bai (AITAB) for sole-proprietorships, partnership, private limited and public limited Companies. It refers to a hire-and-sell concept whereby the financier (Maybank Islamic) will purchase the vehicle/equipment/machinery that are classified as non-act goods and subsequently hire it to the potential customer on agreed terms and conditions and for tenures ranging from three to five years.
Ibrahim says that the introduction of these two new Islamic financing solutions will assist customers to improve their cashflow and liquidity positions, particularly during the current challenging economic environment.
He adds that customers would also benefit from the various incentives offered under the Islamic banking scheme.
"In addition to the 20% stamp duty discount given for all our existing Islamic financing products, CMA-i is also being offered at competitive rates with affordable fee structures," he says.
CMA-i and CIHP are Maybank Islamic's latest mainstream banking products introduced since it commenced operations on January 1, 2008.
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