International Islamic Trade Finance Corporation (ITFC) Trade Solutions Provider 1 SLIDE
ABOUT ITFC International Islamic Trade Finance corporation (ITFC) became operational in January 2008, with the purpose of advancing trade to improve the economic condition and livelihood of people across the world. As a leader in Islamic Finance - compliant trade finance, ITFC deploys its expertise and funds to businesses and governments in its member countries. As a member of the Islamic Development Bank Group ( ‘ AAA ’ rated by S&P, Fitch and Moody ’ s), ITFC has provided more than US$ 45.4 billion of trade financing to OIC Member Countries since 2008. With a subscribed capital of US$ 838.83 million, our primary focus is to encourage and act as a catalyst for intra-trade among OIC Member Countries. In 2017, Moody ’ s assigned a first-time issuer rating of A1/P-1 to ITFC with Stable Outlook. 2 SLIDE
Our Vision “ITFC is the leading provider of trade solutions for OIC member countries' needs” 3 SLIDE
Our Mission “ITFC is a catalyst for trade development among OIC member countries and beyond” 4 SLIDE
Our strategy 5 SLIDE
improving lives Improving Lives Advancing Trade Financial Development Sustainability Impact Balancing financial sustainability with development impact 6 SLIDE
57 Where we operate member countries Central Asia Asia MENA South America Sub-Saharan Africa 7 SLIDE
our core competencies + + + + + + Rich Heritage Technical Geographic Solutions for Preferred A1 Rating Expertise Presence Impact Creditor Status Over 40 years of Obtaining A1 Rating experience in trade by Moody’s Originator, Structurer 57 member countries Structured Trade Finance 57 member countries finance/promotion & & Arranger, in 4 continents SMEs/LDMCs: Facilitation, cooperation Implementer, Capacity Building, and Trade Related Promotion Technical Assistance 8 SLIDE
trade approvals 2008 – 2018 (US$ million) 7,000 6,084 6,000 5,200 5,049 5,054 4,900 5,000 4,466 4,445 4,000 3,033 3,000 Total approvals in 2018 2,554 2,505 are US$5.2 billion 2,166 2,000 Since inception in 2008, ITFC’s cumulative funded financing reached US$45.4 billion 1,000 Since inception, ITFC financed 708 operations 0 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017 2018 * 15 months 9 SLIDE
trade approvals by region 2008 – 2018 US$ million 4,000 3,353 3,415 3,500 3,229 3,086 3,000 2,464 2,402 2,500 2,270 2,172 2,142 1,959 1,848 2,000 1,673 1,544 1,513 1,477 1,399 In 2018, ITFC merged the 1,500 1,286 1,171 Asia/CIS and MENA portfolios. 990 879 849 1,000 826 760 586 530 448 500 235 230 209 195 160 161 0 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017 2018 Asia/CIS MENA Africa * 15 months 10 SLIDE
trade activities in numbers 2008 – 2018 Approvals by Instrument Trade Approvals by Sector 1% 10% 6% 9% 13% Sovereign Energy Corporate Structured Financial 12% 11.5% Bank Guaranteed Food & Agriculture Credit Insurance Other 68.5% 72% 11 SLIDE
trade approvals for LDMCs (2008 – 2018) 64% 36% Trade approvals for Providing trade for other countries LDMCS Since inception, Trade Finance Approvals for Lest Developed Member Countries (LDMCs) reached US$ 16.4 billion representing 36% of total approvals. 12 SLIDE
Financing Trade with Development Impact SYNDICATION AND TRADE OPERATIONS RESOURCE MOBILIZATION ISLAMIC FINANCE PRODUCTS 13 SLIDE SLIDE 13
financing mechanisms Direct Financing: ITFC purchases the goods from the supplier, on behalf of the beneficiary, and • sells them immediately to the beneficiary with deferred payment arrangement. Title of goods is transferred immediately from ITFC to the Beneficiary. Line of Financing: It is designed to ultimately benefit SMEs. Banks / FIs act as Intermediary (Lines • Agents) between ITFC and the end beneficiaries, whereby ITFC signs Murabaha Agreement with end beneficiary (SME) against a Guarantee from the Bank/FI. Two-Step Murabaha: It is designed to ultimately benefit SMEs. ITFC signs a Murabaha contract • with the bank (the bank is the counterparty to ITFC); who sings a second Murabaha contract with the SME. Deferred Murabaha (Structured Commodity Finance): ITFC purchases the goods and holds • the title until it is sold to the beneficiary. The goods may be sold (i.e. transfer of title) in one or several sale transactions to the beneficiary during the financing period. Co-Financing & Syndication: In this mode of financing, ITFC, acting as a Mudarib (lead arranger • ITFC may also participate or co-arranger), invites one or more Financial Institutions to participate in the financing in syndications arranged by other institutions Islamic Discounting: This is similar to what is known conventionally as Factoring / Forfaiting. • ITFC purchases goods from an exporter against assignment of receivables due from his end- buyers. The exporter acts as ITFC ’ s agent to sell the goods and financing can be offered with or without recourse on the exporter. 14 SLIDE
Security Type is a form of a Letter of Governmental (Sovereign) Guarantee: from the Corporate Guarantee: • • Guarantee (L/G) provided by a parent or any other Government, Central Government or any competent entity (with acceptable creditworthiness to ITFC) and as agencies of the Government in the Member Country determined by exposure ceiling guidelines. Bank Guarantee Financing: from commercial banks or • Structured Finance: ITFC may also consider other financial institutions acceptable to ITFC and as determined • types of securities such as Assignment of Receivables by exposure ceiling guidelines. from an acceptable debtor, mortgage and other securities that meet ITFC ’ s criteria. Credit Insured Financing: from insurance providers • acceptable to ITFC and as determined by exposure ceiling guidelines. Personal Guarantee(s): ITFC may consider Jointly & • Several Guarantee of the sponsors in certain cases. Certified statement of personal assets and liabilities needs Structured Commodity Finance (SCF): Asset backed • to be provided. financing where the underlying security is a commodity stored in a warehouse and leased/subleased by a Collateral Manager. The title of the goods remains vested in ITFC until it is purchased by the beneficiary with a minimum Security Coverage of 115%. The commodity should be liquid with readily available market (i.e. grain, crude oil and petroleum products, steel and metal … .etc). 15 SLIDE
resource mobilization in numbers 25 Since inception in 2008, ITFC successfully achieved US$ ITFC has close 27.3 cooperation with more than 65 Syndicated Trade Finance Operations billion in resource mobilization Annually in favor of out of a total amount of US$ more than 45.4 15 institutions, international & regional funds, local billion of trade financing as member countries commercial banks a result of successful in MENA, Africa, across various partnership with Financial Asia & CIS financial markets Institutions and banks 16 SLIDE
Advancing Trade in Our Member Countries with trade development programs INTEGRATION FACILITATION OF TRADE PARTNERSHIPS DEVELOPMENT PROJECTS 17 SLIDE SLIDE 17
Trade Finance and Trade Development How ITFC has contributed to at least 7 SD goals ITFC Contribution • Estimated 10.4 million people provided with reliable access to electricity for one year ITFC Contribution ITFC • US$ 3.8 billion to support • Over 230,300 direct jobs supported energy needs Contribution • 25,900 Female jobs supported by ITFC financing • 40% of clients hold a • 130 deals were sustainable environment • 9,000 new jobs created through ITFC Interventions negotiated policy • 1,500 Youth jobs supported by ITFC financing amounting to • ITFC facilitated the training of 539 youths US$80 million for • US$4.3 billion of intra-OIC trade within a trade ITFC Contribution facilitation • US$439 million to support ITFC Contribution Pharmaceutical • US$920 million in trade finance towards the private food and agriculture needs. B2B Conference • US$293 million of food and sector • US$759 million of trade finance towards SMEs agriculture financing in Africa . • US$146 million of food and • 33% of raw materials imported by clients from LDMCs agriculture financing in Asia • 20% of finished goods exported by clients to LDMCs ITFC Contribution ITFC Contribution • Estimated 88,000 people • US$4.03 billion mobilised lifted out of poverty . from financial partners • $4 mobilised for every $1 • US$4.9 billion in trade provided by ITFC capital finance across 19 countries . • ITFCs finance represented 38% of the clients total • 36% of trade finance external financing on average involved LDMCs amounting to US$1.7 billion . 18 SLIDE
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