Agrobank has confirmed to GTR that it has this week launched its first trade finance products and services.
The shariah-based facilities launched on August 19, 2014, will be used to facilitate its SME, commercial and corporate customers with short-term working capital financing.
Among the trade finance products now available are letters of credit, murabahah trust receipts, trade working capital financing, bank guarantees, shipping guarantees and forward exchange contracts. They will be used to intensify its trading activity.
Agrobank’s president and CEO, Dato’ Wan Mohd Fadzmi Wan Othman, said at the launch that with the facility, Agrobank becomes the first development finance institute in Malaysia to have its own trade financing service.
Zarina Mohd Yazid, section head of sales, trade finance department, Agrobank says to GTR: “We can now deal in local transactions as well as foreign and business transactions,” but did stress that Agrobank, as a government-owned development institution, only focuses on the agriculture and forestry-based industries.
GTR was informed that before the official launch this week, the trade finance products had been through a soft launch period, which started on July 17, 2013. Up until June 2014, Agrobank has approved RM468.8mn with total disbursement of RM224.52mn in the agriculture sector.
The positive response received during its soft launch “is a testament of the customers’ confidence in its services despite being a new player in trade financing,” GTR was told. “With this new facility, the bank aspires to be the preferred business partner for agro-based industries.”
In 2013, Agrobank contributed 10.2% (RM3.6bn) of the overall RM31.7bn of agriculture financing in Malaysia. In addition, Agrobank also contributed 31.7% of the RM5.2bn overall food sector financing in the year.
The products were officially unveiled by Malaysia’s minister of agriculture and agro-based industry, Ismail Sabri Yaakob, at the Economic Consultation and Management of Agriculture Technology 2014 seminar held on Tuesday.