The Department of Trade and Industry (DTI) yesterday signed a memorandum of understanding (MOU) with DK P.O. Fulfillment Company Inc. for the introduction of the latter’s no-interest financing program specifically for small players in the halal industry.
Antonio Intal, DK P.O. executive chairman, in a press conference explained the company’s Purchase Order (PO) Fulfillment Program, is a PO-based profit sharing between the business owner and the company.
The MOU between DTI and DK P.O. will provide non-interest-based financing opportunities for micro, small and medium enterprises, providing an avenue for their integration into the Halal industry. The concept of non-interest financing addresses financial and economic inclusions and supports one of the underlying principles in Islamic financing, such as the absence of “riba” or interest.
Intal said DK P.O. will finance a portion of the financing requirement of a business owner on products covered by a PO it has with a retailer or a distributor. DK P.O. gets a 30-percent share in the profit made by the business owner.
Intal said the scheme is transactional profit sharing unlike that of a bank which earns money from the interest imposed on a loan.
But he noted the need to educate people on how the scheme works.
“People resist it because they do not understand it,” Intal said.
He added: “The mode of Islamic or halal financing requires educational process and change of mindset.
Many think of traditional or getting loans where you pay interest. Education is critical to this new mode of funding,” he said.
In the same event, Trade Secretary Alfredo Pascual said the DTI through SB Corp. will help introduce clients to DK P.O.
The PO Fulfillment Program is a proprietary system built for sustainable business performance. It is a comprehensive and integrated growth tool designed for expanding businesses with little or no access to capital reserves, insufficient funds to pay for the cost of goods, poor cash flow, or chronic difficulties securing traditional bank funding.
Apart from the marketing and promotional activities, the MOU will provide MSMEs with services and programs for logistics management, quality control and inspection, custom brokerage, insurances, and global sourcing and procurement.
Pascual also noted the need to establish halal- certifying bodies in partnership with Malaysia and other countries where the Philippines can adopt their practices and standards.
Pascual said the Philippines has entered into partnerships with halal powerhouses in the region, namely, Malaysia, Indonesia, and Brunei Darussalam, to learn the best practices in generating P230 billion trade and investments in the halal industry in five years.
Another starting point is the revival of enterprises in Marawi City.
The DTI announced the Halal Economy Festival will be held next month featuring a trade and investment forum, business-to-business meetings, exhibit Halal-certified products and services.
