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Trade Finance
The Trade Finance team primarily focuses on providing working capital
finance for local and overseas corporate customers. Trade Financing
facilities are arranged through Murabaha transactions whereby KFH
purchases legitimate goods directly from suppliers, and sells them to
its customers on a deferred payment basis. The Bank earns a mark up on
these transactions, which is usually benchmarked to LIBOR. These
transactions are facilitated by advance agreements with the clients
wherein they give an undertaking to purchase the goods from KFH at a
predetermined price, and agree on a repayment scheduling.
IID manages a large number of local and overseas Trade Finance
accounts. Customers requiring Trade Finance facilities could open an
account with KFH, either in a local or a foreign currency with a
minimum deposit of one hundred thousand Kuwaiti Dinars or its
equivalent.
Some of the past Trade Finance transactions of IID are listed
below:
Islamic Development Bank (IDB)
KFH participated in providing a Murabaha facility of US$ 84 million to
IDB together with a consortium of international banks for the benefit
of IDB member countries.
Malaysian Airlines
arranged a US$ 100 million Murabaha facility for Malaysian Airlines in
partnership with Citibank, Malaysia.
Thai Petrochemical Industry
KFH participated in providing a Murabaha facility of US$ 65 Million
for Thai Petrochemical Industry Company in partnership with Citibank.
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