A fast paced trading environment requires your business to execute efficient and prompt delivery of your products. Take your business to greater heights through KFH Trade Financing-i products where we provide facilities that support your trade and procurement requirements, allowing your partners to secure their trust for your products and services.
A written undertaking by KFH Malaysia at the request of the Buyer/Applicant to pay the Seller/Beneficiary a certain sum of money as stipulated in the Letter of Credit, provided that the Seller/Beneficiary complies with the terms and conditions of the Letter of Credit.
The Letter of Credit can be issued under Wakalah contract (agency relationship) or Murabahah Contract (Cost Plus). Under Wakalah concept, upon received all the shipping documents customer in order to collect the documents instruct KFH Malaysia to Debit their current account for settlement hence payment to its supplier. Whereas under Murabahah concept, upon receiving shipping documents the goods purchased can be financed under the Murabahah contract (cost plus).
- Wakalah Contract (WLC)
- KFH Malaysia is appointed to act as an agent on behalf of the Buyer/Applicant
- Buyer/Applicant will place deposit to the full amount of goods to be purchased
- KFH Malaysia establishes the Letter of Credit and remits the payment to the Seller/Beneficiary utilizing the customers' deposit
- Murabahah Contract (MLC)
- KFH Malaysia will act as the financier for the Buyer/Applicant for the purchase of the goods
- KFH Malaysia will establish the Letter of Credit and purchase the goods from the Seller/Beneficiary by utilizing customer's limit or banking facility with the bank
- Under this contract, KFH Malaysia will then sell the goods to the Buyer/Applicant at a sale price comprising its cost and a profit margin
- Buyer/Applicant is given a deferred payment term for the settlement of the purchase
- No 'transit cost' charges as KFH Malaysia remits payment to the Seller/Beneficiary only upon receipt of documents
- No other hidden costs
- Efficient payment arrangement
A financing facility under the Murabahah contract, to finance domestic or international trade documents against Inward Bills for Collection or Open Account.
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:
- KFH Malaysia purchases or appoints the customer as its agent to purchase the goods on its behalf
- Upon delivery of goods, KFHMB pays the supplier at sight or upon maturity of credit term for the cost of goods based on the invoice value
- KFH Malaysia 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
- 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
- Can provide up to 100% financing of invoice value
Shipping Guarantee is a facility where KFHMB indemnifies and guarantees the shipping company for the release of goods to the buyer/importer without the presentation of the original Bill of Lading.
Issued under the Kafalah contract, it can be defined as a surety provided by a party to the owner of the goods, who had placed or deposited his goods with the shipping company, whereby any subsequent claim by the owner for his goods must be met by the guarantor.
- Importer can take delivery of goods immediately
- Importer will not have to incur demurrage and warehousing charges
- Enables the importer to sell the goods without delay
Bank Guarantee is an irrevocable written obligation issued by KFH Malaysia to pay an agreed sum, in case the customer defaults in fulfilling his obligation.
Issued under the Kafalah contract, Bank Guarantee is KFH Malaysia┐s irrevocable undertaking to guarantee performance or financial standing of a customer. Bank Guarantee is not a financing instrument.
- KFH Malaysia acts as a guarantor. In the event the customer defaults in performing his obligations
- KFH Malaysia will take the responsibility to honor the beneficiary's claims
- All Bank Guarantee must have specific expiry date and claims period
- The period of Bank Guarantee issued must not exceed 1 year except
- Bank Guarantee to cover government contracts
- Bank Guarantee in respect of contracts for a specified period
- Bank Guarantee is widely accepted, thus giving the beneficiary more confidence.
Documentary Collection is a way of channeling shipping documents for Import and Export where KFH Malaysia act as a (Presenting / Collecting) Agent bank to channel the said documents to the intended recipients. Governed by URC522 rules, collection documents could be either Document Against Payment "D/P" (At Sight) or Document Against Acceptance "D/A" (Usance Term).
- KFH Malaysia acts as a (Presenting / Collecting) agent.
- KFH Malaysia acts in handling of financial and commercial documents, in accordance to instructions received
- KFH Malaysia can act on behalf of customer for channeling Import document or Export document.
- Documentary Collection widely accepted especially for established relationship between Buyer and Sellers
- Enables the customer to settle payment obligation to the seller not under LC
- By using KFH Malaysia as a financier under Murabahah Contract facility i.e. Murabahah Tawaruq, it will enables importer monitor its 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
- Open for any trade financing requirement acceptable by the Bank
- Margin of financing is based on the master limit approved by the Bank
- Available in foreign currencies of your choice
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