Page 24 - EXIM-Bank_Annual-Report-2023

EXIM BANK MALAYSIA
22 A Vision to Serve Empowering Growth Management Discussion and Analysis
ANNUAL REPORT 2023
OVERVIEW OF EXIM BANK’S BUSINESS OPERATIONS

TRADE CREDIT TAKAFUL FACILITIES Medium- to long-term trade credit takaful facilities
The Bank offers Islamic takaful facilities for short-term trade
credit takaful/insurance and medium- to long-term trade credit Medium- to long-term trade credit takaful that has a policy
takaful/insurance. term of more than one year is offered by the Bank to enable
Malaysian companies to venture into new and unfamiliar
markets. The Bank provides specific takaful policies to cover the
Short-term trade credit takaful facilities export of capital goods or services with lengthy manufacturing
and/or payment periods and high contract values.
Short-term trade credit takaful encompasses export, domestic
and import trade transactions with a policy duration of less than Overseas investment takaful is provided to protect overseas
one year. These facilities offer comprehensive coverage for investments against certain political risks, such as losses arising
exporters/importers engaged in regular overseas exports and from restrictions on the conversion or transfer of local currency,
domestic imports, facilitating credit terms of up to 180 days. expropriation, wars and civil disturbances and breaches of
Additionally, they extend protection for exports originating contract by counterparties.
from third-country suppliers directly to their overseas
destinations, bypassing Malaysia. As part of the range of The Bank also offers specific takaful facilities to provide
medium- to long-term Shariah-compliant coverage to Malaysian
takaful facilities addressing short-term commercial credit risk,
the Bank also furnishes Shariah-compliant bankers’ trade credit contractors and manufacturers undertaking one-off contracts for
takaful options. These aim to safeguard financial institutions export of capital goods, turnkey projects, construction works,
from the potential non-payment risk resulting from defaults by or rendering services abroad against commercial, economic,
their overseas customers. and political risks and losses occurring outside Malaysia
due to events that are beyond the control of the contractor,
Moreover, the Bank provides takaful policies for bank letters manufacturer or its buyer.
of credit, safeguarding Malaysian banks from the risk of
non-payment associated with irrevocable letters of credit As at 31 December 2023, Bank’s total exposure under both
issued by overseas banks for Malaysian exports. As of the short term and medium to long-term trade credit takaful
year-to-date (YTD) figures for 2023, the Bank’s cumulative facilities amounted to RM0.65 billion.
exposure under short-term trade credit insurance/takaful stands
at RM0.30 billion.