International Islamic Trade Finance Corporation (ITFC) (A member of the IDB Group) Islamic Finance Awareness Seminar in Brazil San Paulo, October 4-5 Copyright © ITFC 2010

Chairman - President of the IDB Group Chief Executive Officer (CEO) ITFC Management Board of Directors Chairman - President of the IDB Group Chief Executive Officer (CEO) Deputy Chief Executive Officer (DCEO) 10 Directors Copyright © ITFC 2010

ITFC Mission & Vision Mission vision We exist to be a catalyst for the development of trade among OIC member countries and with the rest of the world ITFC is to be a recognized provider of trade solutions for OIC MCs needs ITFC’s desired future intended state: We are fostering OIC MCs trade and trade-integration We are responsive to customers’ needs with innovative shariah compliant solutions We are the preferred choice for trade solutions We are delivering fair returns for our shareholders Copyright © ITFC 2010

Major Objective – Catalyst Role: Article 5 of the Articles of Agreement of ITFC states : “ The purpose of the Corporation shall be to promote trade of member countries of the Organization of Islamic Conference through providing trade finance and engaging in activities that facilitate intra-trade and international trade” Makkah Declaration (2005). Increase the intra-OIC trade volumes to 20% of the world trade by 2015. Copyright © ITFC 2010

Financial Institutions Members of ITFC IDB is the major shareholder of ITFC Countries 38 Financial Institutions 17 Total is 55 Copyright © ITFC 2010

ITFC Establishment: Resolution to establish the ITFC was approved during the IDB Board of Governors meeting in 2005 in Malaysia The ITFC’s Articles of Agreement was signed during the IDB Board of Governor’s meeting in Kuwait in 2006 ITFC Became operational as of 10 January 2008. Authorized capital is US$ 3 billion Subscribed capital is US$ 750 million Copyright © ITFC 2010

Operating Performance : Approval of Trade Finance ( 1429H – 1430H ) US$ million Copyright © ITFC 2010

Operating Performance : Analysis of approvals : Geographic : US$ million 1429H Percentage 1430H Asia / CIS 1,281 51% 1,477 68% MENA 989 40% 530 25% Africa 235 9% 159 7% Total 2,505 100% 2,166 Copyright © ITFC 2010

Operating Performance : Analysis of approvals : Public/Private Sector US$ million Least Developed Member Countries: 1429H 1,082 43% 1430H 987 46% Public Sector Private Sector Total 1429H Amount Percentage 1,405 56 %  1,100 44 %  2,505 100%  1430H Amount Percentage 1,265  58 % 901 42 %  2,166 100%  Copyright © ITFC 2010

Operating Performance : Analysis of approvals Intra-OIC trade “Source of Supply” 1429H 2,071 83% 1430H 1,769 82% Major Commodities 1429H Crude Oil, Agricultural inputs and Fertilizers, Aluminum, Industrial Materials 1430H Crude Oil, Industrial raw materials, Sugar, Aluminum, Food products Disbursements 1429H US$ 1.3 Billion 1430H US$ 1.5 Billion Copyright © ITFC 2010

Operating Performance : Lines of Financing for SMEs 1429H 9 Lines US$ 98.50 million 1430H 12 Line US$169.10 million Funds Mobilized : Syndications & Co-Financing 1429H US$ 878 million 35 % of approvals 1430H US$ 794 million 35 % of approvals Copyright © ITFC 2010

Key Operational Partners: IFC AfDB SFD OFID ATFP Banks and Financial Institutions in the Middle East, Far East and Europe e.g. HSBC, JP Morgan, BNP Paribas and other local and regional banks. Copyright © ITFC 2010

Trade Cooperation and Promotion Program(TCPP): Activities carried out in the last two years TCPP classified into : Trade Promotion Trade Facilitation Capacity Building Development of Strategic Commodities Copyright © ITFC 2010

Modes of Financing Murabahah (Cost-plus sale) : Under this mode, ITFC will purchase goods or commodities from a supplier at the request of the Beneficiary and then sell them to the Beneficiary with a deferred payment arrangement. The difference between the Purchase Price and the Sale Price is a reasonable mark-up added to the Purchase Price Other Products: Bai Ajel (Installment Sale) Istisna’a (Manufacturing Contract) Ijarah (Leasing) Copyright © ITFC 2010

Main Features of Import Finance : Transaction Structure : Murabaha Currency of Finance : US Dollar Eligible Goods : All goods acceptable under ITFC’s Trade Financing Rules Tenor : 3 – 12 months Mark-up : According to the market Security : Bank Guarantee, Sovereign guarantee, Structured trade Finance.. etc. Copyright © ITFC 2010

Modes of Finance : Direct Finance Co-finance Syndication Structured Trade Finance Lines of Financing to local banks for the benefit of SMEs. Copyright © ITFC 2010

Key ITFC-financed strategic commodities a) Oil and related products b) Raw sugar c) Plastics d) Chemicals e) Coffee, wheat, cotton, etc… Copyright © ITFC 2010

Collection Account Bank Example: Raw Sugar Deal between Indonesian Importer and Supplier from Brazil 4. CM (Warehouse) ITFC 7. Importer Documents presented 3. 2 1. 5. 6. payment Collection Account Bank Suppliers 1. ITFC receives 20% deposit of the invoice from Indonesian Importer. Money is transferred to ITFC. Goods are shipped and documents are presented. ITFC pays the Supplier. Sugar is delivered to the Warehouse under Collateral Management.CM issues Warehouse Receipt to ITFC on sugar under custody. PT AP pays for the value of sugar it requires into the Collection Account. Escrow Account Bank gives release instruction to CM upon receipt of payment. Indonesian Importer takes delivery of sugar for refining.

Contact Info International Islamic Trade Finance Corporation: Tel : +966 2 6361400 Fax : +966 2 6371064 E-mail: info@itfc-idb.org P.O. Box 55335, Jeddah 21534 Kingdom of Saudi Arabia Copyright © ITFC 2010

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