Islamic Products
Islamic Mortgage Guarantee Programme (MGP-𝙞 )

What is MGP-𝙞 ?
- It is a programme that guarantees 10% of the Islamic house financing amount granted by an Islamic Financial Institutions (IFI) to its Customers.
- It is undertaken by Cagamas SRP Berhad (CSRP), a wholly owned subsidiary of Cagamas Holdings Berhad that offers ‘first loss’ protection on an Islamic mortgage portfolio while the Islamic mortgage assets remain on the IFI’s books
- The programme is formulated under Shariah principle of Kafalah and Wakalah
Product Features
- Product Description
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CSRP will provide ‘first loss’ protection to mortgage originators in Malaysia on a portfolio basis. No individual financing can be taken out from the pool other than natural redemption or amortisation to below the protection threshold.
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- Eligible Financing Type
- Standardised and centralised guarantee programme offered to banks for Islamic mortgage financing.
- Islamic residential mortgage financing complying with the standard Eligibility Criteria (EC).
- Guarantee Coverage
- Current financing-to-value (FTV) ratio of the Mortgaged Property as at the Guarantee Date is not more than 95%.
- Initial guarantee amount is the difference between the current financing amount and the protection threshold amount (e.g. 79.9% of property value at Guarantee Date).
- The guarantee amount will reduce in accordance with the individual financing amortisation schedule which will be determined at the Guarantee Date.
- The guarantee amount is the difference between the “scheduled” outstanding principal balance and the protection threshold.
- Lapse of Protection
Protection will lapse automatically once:
- The “scheduled “ outstanding principal balance of the financing falls below the protection threshold amount (e.g. 79.9% of the property value as at Guarantee Date) by way of financing amortisation or discharge.
- Non-compliance with Representation, Warranty and Eligibility Criteria.
- Payment of Guarantee Amount by Cagamas SRP to the Originator.
- Guarantee fee
- No guarantee fee for Islamic mortgage financing.
- Wakalah Fee
- This fee is applicable for MGP-i.
- Wakalah fee is either a one-off payment for the entire protection tenure or on an annual fee basis paid by the Originator.
- Protection Exclusion
- Exclusion of protection includes events of fraud, misrepresentation of the obligors and/or the financing originators, breach of specified eligibility criteria of the financing as at the Guarantee Date and/or breach of representation or warranty by the financing originators, etc.
- Eligibility Criteria
- Financing Terms
- Maximum outstanding principal balance as at Guarantee Date
- Landed property: RM2 Million
- Non-landed property: RM0.7 Million - Maximum current financing-to-value ratio is 95%
- Remaining financing tenure as at Guarantee Date must not exceed 30 years
- Minimum 12-month seasoning
- No past due over 1 month and no restructuring agreement in the 6-month period prior to the Guarantee Date
- The financing is a term financing which fully amortised over the financing period. Financing with profit-only payment structure are not eligible.
- The financing is for the purchase or refinancing of a completed residential unit or for renovation of a residential unit.
- Maximum outstanding principal balance as at Guarantee Date
- Obligors
- Maximum debt-to-income ratio is 50% including all debts and based on gross approach calculation.
- Full documentation is required for Income Proof
- Property
- Must be residential and completed property
- The Mortgaged Property must be owner occupied
- The Mortgaged Property must have fire insurance coverage
- Legal Title and Documentation
- The Originator must have good and marketable title on the Mortgaged Property free from other encumbrances
- Financing Terms
Benefits
- Transfers credit risk
- Capital relief is based on BNM Risk Weighted Capital Adequacy Framework
- Facilitates management of portfolio concentration risk
- Improves Return on Risk Weighted Capital
- Improves earning stability
- Limits credit exposure to an acceptable level
- Mortgage assets remain on the balance sheet