Agrobank Launches New Products And Services (Trade Finance)

Nilai, Negeri Sembilan– YB Dato’ Sri Ismail Sabri bin Yaacob, Minister of Agriculture and Agro-Based Industry today officially launched the Agrobanks Trade Finance products and services, a Shariah-based facility to facilitate its Small Medium EnterprIse (SME), commercial and corporate customers with short term working capital financing for their business activities covering both local and foreign trade transactions. With this new facility, Agrobank becomes the first Development Financial Institution (DFI) in Malaysia to offer its own trade finance services.

The launch was held in conjunction with Seminar Konsultasi Ekonomi dan Pengurusan Teknologi Pertanian 2014 jointly organised by Institut Penyelidikan Dan Kemajuan Pertanian Malaysia (MARDI), Agrobank and Universiti Putra Malaysia (UPM), held at Nilai Springs Resort. The two-day seminar started on 19 Aug 2014 with more than 200 participants. Also present at the launch were Yang Hormat Dato’ Wan Mohd Fadzmi Wan Othman, the President/ Chief Executive Officer of Agrobank and YBhg Dato Dr. Shariff Haron, the Director General of MARDI.

Among the products offered under trade finance are Letter of Credit-i (LC-i), Murabahah Trust Receipt (MTR), Trade Working Capital Financing-i (TWCF-i), Bank Guarantee-i (BG-i), Shipping Guarantee-i (SG-i) and Forward Exchange Contract (FEC). This latest facility offered by Agrobank will help its customers to have better cash flow management, thus allowing them to have more focus in the business.

According to Dato’ Wan Mohd Fadzmi Wan Othman, President/CEO of Agrobank, businesses require more working capital to accelerate volume in local and foreign business including cross-border transactions. Therefore, Trade Finance products and services can be very useful tools as source of liquidity. The correct use of Trade Finance instruments can help strengthen entrepreneurs competitive power by being able to utilize trade facility and help to improve liquidity and cash flows while reducing risks. We hope that our new Trade Finance facility will help entrepreneurs in agriculture-based industry to take their businesses to next level in global market. We would like to see more Malaysian companies to penetrate international market thus becoming the worlds main contributors and exporters of agro-based products, said Dato’ Wan Fadzmi further.

Since its soft launch on 17 July 2013, the trade finance facility by Agrobank has received encouraging response from its customers. As at June 2014, Agrobank has approved RM468.8 million with total disbursement of RM224.52 million to various sectors in agriculture.

The introduction of this new facility from Agrobank further reiterates the Banks aspiration to be the preferred business partner for agriculture and agro-based industry in the country. In 2013, Agrobank contributes 10.2% (RM3.6 billion) of the overall RM31.7 billion of agriculture financing in Malaysia. In addition, Agrobank also contributed 31.7% (RM2.4 billion) to the food sector financing in 2013 from the overall figure of RM5.2 billion (68.3%) in 2013.The positive response received during its soft launch is a testament of the customers confidence in its services despite being a new player in trade financing. With this new facility, the Bank aspires to be the preferred business partner for agro-based industries.