Letter of Credit

Also abbreviated as ‘LOC’ or ‘LC’, a Letter of Credit is a document from a commercial bank or financial institution that guarantees a seller will receive a buyer’s payment on time and for the full amount. If this obligation is not met, the applicant’s issuing bank will pay the difference or cover it in full to the beneficiary. 

A Letter of Credit is often used within the international trade industry on account of different laws in each country and the fact that those doing business often do not know each other personally. Therefore, before issuing a LC, the bank or financial institution will assess the applicant’s financial position to determine whether the client’s creditworthiness merits the risk taken on the applicant’s ability to pay. In some cases, the bank or financial institution may consider taking a security to minimise any potential loss.

When used by Islamic banks or financial institution, LCs are not treated as a guarantee but rather as a fee-based service to facilitate trade. Such LCs must Shariah-compliant on the basis of Wakalah, Murabaha or Musharakah.

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While office of Ikhtiar Factoring Sdn Bhd is closed due to the two-week “total lock down”, we would like to inform our existing and prospective customer and clients that business is still operating as usual as we practice Work From Home (WFH) during this period, from 9:00am – 5:30pm (Monday to Friday). Should you require our services, please do not hesitate to contact our Marketing Officers as per below or visit our website www.ikhtiarfactoring.com for more info:

Contact Person:
Nur Atiqah +6018 917 3491 (atiqah@ikhtiarfactoring.com)
Mohd Syafiq +6012 357 3864 (syafiq@ikhtiarfactoring.com)
Khairul Ikhwan +6017 212 4127 (ikhwan@ikhtiarfactoring.com)
Fariz Abu Bakar +6012 323 1334 (farizuddin@ikhtiarfactoring.com)

Our main office will be closed until further notice, however, we would like to assure you that all developments and updates concerning our business will be updated through our social media and official website.


Thank you.