Thai Islamic Bank Gives 1.2 Billion Baht in Loans For Halal Manufacturers

| 22/11/2008 | Reply

BANGKOK, Nov 20 (Bernama) — The Islamic Bank of
Thailand (IBT) plans to lend 1.2 billion baht in 2009 to promote halal
food and product manufacturings while exploring sukuk or Islamic bonds
through “petro money” from Middle East investors.

Its
chairman Professor Dr Somchai Virunhaphol said the fund for halal
manufacturers would then be doubled in two years as there are vast
potential to be tapped.

“Our current financing for halal products
are only about 200 million baht. With Thailand aiming to becoming the
‘Kitchen of the World’, we want to increase our presence and lend to
all types of halal products, including medicine and cosmetics,” he said
on the sidelines of the Bangkok Global Halal Conference here today.

At present, the world halal food market is estimated at over US$265 billion, with Thailand’s export around US$1.7 billion.

“Thailand
market share is very small. So we want to assist our producers and
exporters to convert their products to be halal-compliant. We will also
support them with training programmes,” Somchai said.

At the moment, there are 1,900 Thai companies with halal certification for their products and manufacturing processes.

On
sukuk, Somchai said the prospect for such financing in Thailand was
good and several Middle East countries with large fund at their
disposals have contacted IBT to invest in the kingdom.

“At the
moment, sukuk is almost non-existent in Thailand. The Middle East
countries are keen as they have a lot of money from oil production and
want to offer sukuk to finance mega-projects like mass transportations
and other infrastructure projects,” he said.

According to Somchai, sukuk can be offered in Thailand next year once laws and tax procedures are amended by the Government.

IBT
was set up in 2003 to offer financial services in compliance with
Islamic law and serve the country’s six million Muslim population. The
Thai Finance Ministry is the largest shareholder with 48.54 percent
share in the bank.

Asked if the bank sees competition from
Malaysia’s CIMB Bank once its purchase of BankThai is completed in
January, Somchai said he welcomed such competition.

“I am not
sure about their plan in Thailand but I heard they will have Islamic
window. This is good as in Islam, there should not be any monopoly and
we will have a benchmark to gauge our own performance,” he said.

In
fact, Somchai said, IBT had held talks with Bank Negara Malaysia to
extend cooperation and get know-how in term of Islamic banking and
financing.

He said this was needed in IBT’s expansion plan as it
hoped to open another 10 branches in 2009 from the existing 26, and
increase its staff to 500 from the current 400. — BERNAMA

Category: Asia, Finance & Investment, Media & Events

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