1. What is Accounts Payable Financing?
Accounts Payable Financing (AP Financing) is a short-term financing product that helps businesses (referred to as Issuers) fund their trade transactions — for example, purchasing raw materials to support their operations.
AP Financing – CGCD (also identified by the product code MBIAPCD) is a variant of our standard AP Financing product (MBAP/MBIAP), with one key distinction: investment notes issued under this product are partially guaranteed by CGCD Digital. This added layer of protection is designed to give investors greater confidence in their investment.
2. What are the key differences between MBIAPCD and MBAP/MBIAP?
The table below summarises the key differences:
| AP Financing – CGCD (MBIAPCD) | AP Financing (MBAP/MBIAP) |
CGCD Guarantee | Yes – up to 50% of Defaulted Outstanding Principal | No |
Security | Partially guaranteed | Unsecured |
Type | Islamic only | Conventional & Islamic |
In short, MBIAPCD investment notes carry a CGCD guarantee of up to 50% on the defaulted outstanding principal, which provides a degree of downside protection in the event of an Issuer default. Standard AP Financing (MBAP/MBIAP) does not carry this guarantee.
3. What happens in a case of Delinquency / Default?
In the event of a default, Funding Societies will initiate recovery efforts in line with our standard recovery process. Once a MBIAPCD note reaches ≥ 60 days past due (DPD), Funding Societies will additionally submit a guarantee claim to CGCD.
If the claim meets CGCD's criteria, CGCD will approve and disburse the claim amount into Funding Societies' trust account, in accordance with the agreed Risk Sharing Ratio.
The payout to investors is calculated as follows:
Claim Amount = Guarantee Coverage % × Defaulted Outstanding Principal
Payout Amount = Claim Amount less any amounts already recovered through recovery efforts
Payouts will be distributed to investors after the completion of all necessary recovery procedures, in line with both Funding Societies' recovery guidelines and CGCD's requirements.
4. What is the average return rate for this product?
10%-18% per annum.
5. What is the payment structure?
Bullet payments of principal and returns to be paid at the end of the tenure.
6. Can Issuers repay early? What does that mean for investors?
Yes. Issuers are free to pay at any time within the tenor, and there are no early payment fees charged to Issuers. If early payment occurs, investors will receive pro-rated returns calculated based on the actual number of days the funds were utilised.
7. Is there compensation for late repayments?
Yes. If an Issuer makes payment after the applicable grace period, investors will be entitled to late return compensation, calculated based on the number of days the payment is overdue.
8. What is the tenure?
The tenor is in the range of 15 days to 120 days.
9. What is the Service Fee?
25% on returns received.
10. What is the minimum investment amount?
Minimum Investment Amount: RM100