Aktif Bank has won a US$10mn two-step murabaha financing facility from the International Islamic Trade Finance Corp (ITFC), part of the Islamic Development Bank Group.
Aktif Bank tells GTR that the facility – one of the first two-step murabaha financings − will be utilised in trade finance-related transactions and will support intra-OIC (Organisation of the Islamic conference) trade.
The OIC is an Islamic inter-governmental organisation with a membership of 57 states across Southeast Asia, Africa, the Middle East and Latin America.
Unlike traditional murabaha financing, the two-step system involves an additional financial institution. ITFC/IDB who is financing the transaction, will buy the goods from an exporter and then sell it to the financial institution, in this case Aktif Bank, who will then sell to an importer in Turkey.
Burak Kurtbay, Aktif Bank’s director of trade finance, comments: “The convenience of this tool is that we’re free to design the financing with full authority in dealing with the importer. Contractually we have free reign over the mark-up of the price, although we always base it on market price.”
He continues: “So with this facility in place, we can support ITFC-compliant import transactions in Turkey. The crucial thing was agreeing the facility which we have successfully managed to do with ITFC’s involvement. Now it is time to market this innovative facility to the Turkish importers.”
Last Updated July 27, 2011
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