MIDF aims to provide RM25m Islamic finance

  • Business
  • Thursday, 23 Oct 2003

MALAYSIAN Industrial Develop-ment Finance Bhd (MIDF) targets to disburse new Islamic financing products worth RM25mil by Dec 31, chief executive officer Datuk Mohd Sallehuddin Othman said.  

The four new Islamic financing products introduced by MIDF are Bai'Bithaman Ajil (BBA), Murabahah, Al-Ijarah Thumma Al-Bai' (AITAB) and Al-Ijarah

The BBA concept would be used for fixed assets financing, Murabahah is for working capital financing, Al-Ijarah Thumma Al-Bai' is for the financing of ready-made machinery or equipment while Al-Ijarah is for the normal lease financing. 

To kick-start the introduction of the new financing products, MIDF had raised RM50mil Islamic commercial papers from the capital market, Sallehuddin said after the launch of MIDF's Islamic financing products in Kuala Lumpur on Tuesday.  

MIDF's current financial year was only nine months as the company was streamlining its financial year-end to Dec 31. It would resume a 12-month financial year next year, he said. 

So far MIDF had approved RM2mil worth of loans under its new Islamic financing products. The company was now processing loans worth RM19mil and targeted RM4mil in loans under Islamic financing by the year-end, he said. 

Overall, MIDF targeted RM300mil worth of loans for the nine months to Dec 31, he said. 

“We were targeting RM450mil (for total development finance) but I think we are going to have a shortfall, so our latest estimate is RM300mil for nine months,” he said. 

This shortfall was likely due to competitive rates offered by commercial banks that were starting to provide attractive loan rates to small- and medium-scale industries, he said. 

To date, MIDF had helped some 6,000 entrepreneurs by providing loans amounting to RM7.4bil, he said. – Bernama 

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