PRESS RELEASE: FCI and the ITFC sign Agreement to Create the Islamic Factoring ChapterMonday 10 June 2019
(Ho Chi Minh City, 10th June 2019) – ITFC and FCI signed a Memorandum of Understanding (MOU) today, to create a new Islamic Factoring Chapter within the FCI network. Chaired by a representative from ITFC, the chapter will include thought leaders from the region, to increase financing opportunities for Small and Medium Enterprises (SMEs) via Islamic Factoring. The chapter will support the growth of SMEs in their domestic and international trade under Islamic factoring rules promulgated by FCI.
ITFC joined FCI recently as an associate member with the aim to promote Islamic Factoring within the Chain. The Chapter is a result of ITFC’s contribution to the development of the Supplementary Agreement on Islamic Factoring along with Noor Bank and Tawreeq Holding, which was approved in June 2018.
The objectives of the creation of the Chapter include enabling the growth of Islamic Factoring in the regions, improving regulatory reforms to conduct Factoring in a safe and secure manner, and creating awareness of Islamic Factoring.
The Chapter will promote Factoring as a parallel trade finance instrument, to enable businesses in the Organization of Islamic Cooperation (OIC) Member Countries to trade competitively and support the participation of SMEs as exporters in supply chains. It will introduce Factoring to Islamic banks and non-bank financial institutions (NBFIs) and develop their understanding of pursuing Factoring as a line of business to actively promote trade between OIC member countries and beyond.
Commenting on the MoU, ITFC CEO, Eng. Hani Salem Sonbol, said: “The MoU will enable ITFC to work alongside FCI to develop the legal, regulatory and commercial aspects of Islamic Factoring and secure its place as an increasingly important element in the finance of intra-OIC trade”.
Peter Mulroy, FCI Secretary General, also commented on the MoU: “The Islamic Factoring Chapter is an attempt to create focus and develop a center of excellence with best practices for the Islamic Factoring sector. The idea is to bring a time tested practice of traditional factoring, an open account trade finance solution to Islamic Finance, so they too have solutions to provide their clients, all in a Shariah compliant manner. We are delighted to be working with the Islamic Trade Finance Corporation (ITFC) and the initiative will have the full backing and support of FCI!
FCI and ITFC see opportunities for Factoring in the Islamic Countries as the world trade volumes of OIC Countries reached USD 3.2 trillion representing 9.4% of the World Trade according to the ISLAMIC CENTRE FOR DEVELOPMENT OF TRADE annual report.
FCI was set up in 1968 as a non-profit global association for factoring and receivables finance companies around the world. Today, FCI has grown into the world's representative factoring network and association with close to 400 members in 90 countries and member transactions representing nearly 90% of the world’s international correspondent factoring volume. Today, FCI is the global representative body for the Factoring & Receivables Finance Industry. FCI offers three major areas of activities:
CONNECT: The business network supports cross-border factoring activities through which its members cooperate as export and import factors
EDUCATE: FCI promotes and develops best practices in both domestic and international factoring and related Open Account Finance products
INFLUENCE: FCI promotes and defends the Industry with stakeholders and policy makers worldwide
About the International Islamic Trade and Finance Corporation (ITFC):
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the purpose of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving socioeconomic conditions of the people across the world. Commenced operations in January 2008, ITFC has since consolidated all trade finance businesses that used to be handled by various windows within the IsDB Group. Earning the A1 rating by Moody’s reflects the Corporation’s efficiency in service delivery by responding swiftly to customer needs in a market-driven business environment.
Since 2008, ITFC has provided more than US$45 billion of trade financing to OIC Member Countries, making the Corporation the leading provider of trade solutions for OIC Member Countries’ needs. With a mission of being a catalyst for trade development among OIC Member Countries and beyond, the Corporation helps entities in Member Countries gain better access to trade finance and provides them with the necessary trade-related capacity building tools, which would enable them to successfully compete in the global market.
Linkedin: International Islamic Trade Finance Corporation (ITFC)
Tel: +966 12 646 8337
Fax: +966 12 637 1064