March 11, 2010

Jordan Islamic Bank to finance US$141 million of grain imports

Jordan Islamic Bank (JIB) on Monday (Mar 8) signed a JOD100 million (US$141 million) finance agreement with the Ministry of Finance, a bank statement said.

Under the agreement, the JIB will extend to the government the required funds for its imports of wheat and barely.

The agreement, signed by Finance Minister Mohammad Abu Hammour and JIB General Manager Musa Shihadeh, is governed by a murabaha contract, one of the Islamic finance and investment methods applied by the bank.

The government should pay back the principal amount at three biannual instalments, after a six-month grace period.

In implementation of the agreement, the JIB will open letters of credit to facilitate the purchase of wheat and barely at a ceiling of US$100 million.

On behalf of the government, the Industry and Trade Ministry will be the party responsible for managing and following up on these transactions.

Industry and Trade Minister Amer Hadidi who attended the signing ceremony said the agreement will contribute to the government's financial stability and reduce the government's total bill for importing wheat and barely which exceeds JOD100 million (US$141 million) annually.