The Export-Import Bank of Thailand (Exim Bank) has teamed up with the Islamic Bank of Thailand (IBank) to offer loans with interest rates lower than the prime rate to support the goal of becoming Asean's halal hub by 2028.
On Tuesday, Exim Bank and IBank, along with representatives from the Sheikhul Islam Office (Chularatchamontri) and sectors involved in supporting halal products, signed an agreement for "the project to support and promote Halal product entrepreneurs to export".
The project aims to drive the growth of Thailand's halal export sector this year. It wants to enhance the potential and help Thai small and medium-sized enterprises export halal products to international markets through integrated cooperation in promoting and developing academic knowledge on the subject of halal.
Rak Vorrakitpokatorn, president of Exim Bank, said Thailand is the world's 15th largest exporter of halal food and the fourth most popular destination for Muslim tourists worldwide, who are very interested in Thai food and cultural tourism.
Major exporters of halal food to the Organization of Islamic Cooperation (OIC) group of nations include Brazil, India, the US, Russia and Indonesia, while major importers of halal food within the OIC group are Indonesia, Malaysia, Turkey, Saudi Arabia and the United Arab Emirates.
Therefore, Thai entrepreneurs should elevate their halal product development, especially food, which Thailand is renowned for worldwide. This includes naturally halal foods such as vegetables and fruits, or halal certified foods that are accepted internationally for their cleanliness, absence of alcohol and animal blood, and adherence to Islamic principles.
According to Mr Rak, participants in the project will receive interest rates below the prime rate from Exim Bank to use as working capital or for investment expansion.
For instance, the bank's First Step Export Financing scheme is offered at 5.35%, which is 1 percentage point lower than the bank's prime rate, with a maximum loan amount of 3 million baht. The Exim Green Start loan has an interest rate of 4.1%, 2.25 percentage points lower than the prime rate, with a maximum loan amount of 200 million baht. Export Ready Credit offers an interest rate of 4% with a maximum loan amount of 20 million baht.
Thaweelap Rittapirom, director and president of IBank, said that between 2012 and 2022, consumer spending in the halal market has grown by more than 40%, with the market value rising from US$1.62 trillion to $2.29 trillion. This growth is driven by the rapidly expanding Muslim population, which now numbers almost 2 billion worldwide.
Global companies such as BRF, Nestlé and Nike have continuously invested in and developed diverse products to meet the needs of the halal market. Additionally, development institutions within the OIC, such as the Islamic Development Bank and the Islamic Centre for Development of Trade, as well as important UN agencies such as the UNHCR and World Bank, have shown interest in Islamic finance from a social perspective, he said.