| Trade Financing |
Print | Bookmark |
Trade Working Capital Financing-i (TWCF-i)
A financing facility under the Murabahah contract, to finance domestic or international trade documents against Letter of Credit or Inward Bills for Collection.
Murabahah refers to the sales of goods at a price, which includes cost plus profit as agreed by both seller and the buyer. This contract allows the customer to take delivery of the goods immediately on arrival and settle with the Bank on a deferred payment arrangement.
Using this facility:
- Bank Islam purchases or appoints the customer as its agent to purchase the goods on its behalf
- Upon delivery of goods, Bank Islam pays the supplier at sight or upon maturity of credit term for the cost of goods based on the invoice value
- Bank Islam subsequently sells the goods to the customer on deferred payment terms at a price inclusive of the Bank’s profit
- Customer will undertake to settle the selling price on the maturity date
BENEFITS
- Enables the customer to settle payment obligation to the seller
- Facilitates convenient cash flow management of a business by having a fixed rate financing nature
- As a prudent and reliable basis in the preparation of the business projection, since the selling price will not be affected by fluctuation in the Base Financing Rate
- Provide up to 100% financing of invoice value
|