MANAMA: Tamkeen and Bahrain retail and commercial banking institution BMI Bank yesterday announced the extension of its successful Sharia-compliant financing scheme for enterprises within the local private sector to fulfil their financial needs at a competitive cost.
The joint scheme was initially launched in November last year, and offers a suite of Sharia-compliant financial products under the umbrella of the Islamic banking division of the bank.
The new top-up agreement is the second contribution in less than a year to be added to BMI Bank's funding pool resulting in a total portfolio of BD20 million ($53m).
As part of the agreement, Tamkeen will guarantee 50 per cent of the total financing amount as well as subsidise 50pc of the profit payments due from customers.
Through this financing scheme, private sector enterprises will be eligible to receive financing ranging from BD10,000 to BD500,000 to help design a higher growth trajectory for their companies. This scheme offers a range of trade finance products such as letters of credit and guarantee, Murabaha financing which covers working capital, machinery and equipment financing as well as Ijara financing at a subsidised profit rate of 4pc per annum on reducing balance with an option of a longer repayment tenor of up to 10 years.
"Our strategic partnership with Tamkeen, which began in 2010, has grown from strength to strength with customers reaping the rich benefits that the scheme has to offer," BMI Bank chief executive Jamal Al Hazeem said.
"Enterprises form the backbone of any economy and as a responsible local retail and commercial bank, we are pleased to be able to participate in providing them with convenient financial solutions that help in enhancing and increasing their productivity," he added.
"A key factor for any competitive yet successful economy is the presence of a strong and well developed small and medium enterprises (SMEs) segment," BMI Bank head of Islamic banking Salah Khalifa said.
"Bahrain's economy is characterised by various competitive sectors with SMEs dominating that share.
"BMI Bank is privileged to be part of the welfare of this segment and aligned its strategies in line with Bahrain's business strategic vision," he added.
"The agreement announced today has been designed to provide an attractive opportunity for SMEs while positioning Tamkeen to pursue a long-term outlook of growth and future success," Tamkeen's chief executive Mahmood Al Kooheji said.
"Tamkeen's Finance Scheme provides greater flexibility to focus on meeting the demands of a dynamic marketplace at a time Islamic financing is becoming another major source of funds globally," he said.
"This agreement reflects our confidence in BMI Bank who share the same optimism as we do towards enhancing market outlook," he added.