Maybank Islamic aims to secure RM750m in financing

Maybank Islamic Bhd is targeting to secure RM750 million of financing for the next financial year, from its two new products — Commodity Murabahah Term Financing-i (CMTF-i) and Murabahah Term Financing-i (MTF-i).
Its acting CEO Ibrahim Hassan said the launch of the two products, given the current challenges, is part of Maybank's commitment to provide continuous financing access to viable local SMEs as well as support the government's various initiatives to ensure sustainability and growth of businesses during this period.
The new facilities complement the bank's existing Term Financing-i and is an alternative for customers to manage their asset acquisitions and refinancing, he said in a statement yesterday. Both facilities are offered at very competitive profit rates, and is in addition to the 20% stamp duty discount given to the bank's existing financing products.
"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."
To date, Maybank Islamic has more than RM7.9 billion in outstanding financing to the business sector, he added. The CMTF-i and MTF-i are term financing facilities based on the Shariah concept of Murabahah (cost plus profit).
Both facilities are 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 adopt 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.
For CMTF-i, a specific commodity will be identified and used as an underlying asset for the sale and purchase transaction between bank and customer.
The bank buys the commodity at cost and sells it to the customer at cost plus profit after which the customer will pay the financing amount and the profit to the bank on a deferred payment basis.
Currently, the commodities that are used for CMTF-i are tradeable Shariah-compliant commodities such as zinc, tin, lead, palm oil and wheat. CMTFi is also available in foreign currencies denominations, giving more flexibility to the customers for their domestic and international business operations.
Meanwhile, MTF-i is another method used in providing financing for purchase and refinancing of assets. 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.

(This story appeared in The Malaysian Reserve on July 2, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)