BAKU, Azerbaijan, Nov. 20
By Fakhri Vakilov - Trend:
The State Agricultural Support Fund under Uzbekistan’s Ministry of Finance has signed a financial agreement worth $50 million with the International Islamic Trade Finance Corporation (ITFC), Trend reports citing Uzbekistan’s Ministry of Finance.
The International Islamic Trade Finance Corporation provides funds for the processing and production of cotton raw materials, as well as for the organization of production based on processing.
The document was concluded in the form of Murabaha - a trade agreement in which the seller directly indicates the costs incurred by him/her on the goods sold, and sells them to another person with a mark-up to the initial cost, which is known to the buyer in advance. So a financial institution makes a profit, but the transaction itself under such an agreement is considered interest-free.
The State Fund for Agricultural Support under the Ministry of Finance is called upon to mitigate risks with a sharp decline in world prices for cotton fiber.
The International Islamic Trade Finance Corporation is an autonomous entity within the Islamic Development Bank (IDB) Group created with the purpose of advancing trade to improve the economic condition and livelihood of people across the Islamic world.
ITFC has consolidated all the trade finance businesses that used to be handled by various windows within the IDB Group.
The consolidation of the IDB Group’s trade finance activities under a single umbrella increased the Corporation’s efficiency in service delivery by enabling rapid response to customer needs in a market-driven business environment.
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