Islamic Development Bank

How Islamic social finance can be used to fight povert

A report from the Islamic Development Bank suggests that an Islamic social finance product "Zakah" has great potential in curbing poverty for countries in Sub-Saharan Africa. CNBC Africa spoke to Mohammed Obaidullah, Senior Economist at the Islamic Development Bank and Lead Author of the Islamic Social Finance Report, to get more insight on this.

Islamic finance gains traction in search for alternative models

Islamic financing is gaining traction even among non-Muslim countries in a bid to use sustainable and equitable form of alternative models, the Malaysian Prime Minister said on Tuesday. London issued its second Islamic sukuk after its first bond issue was oversubscribed 14 times. In addition to London, Luxembourg and South Africa, Hong Kong has also issued sovereign sukuks.
“Ever since the global financial crisis in 2007-08 there has been a sharp demand for alternative economic and business model that reduces the level of speculation as conventional model that has inherent weakness,” Najib Razak told journalists. “Over-leveraging is believed to have been the root cause of the disaster — but again, that is prohibited in Islamic finance. As a result, Islamic banks remained strongly capitalised and resilient against financial market volatility, while continuing to contribute positively to equitable and sustainable growth,” he said.

Islamic Bank May Support Green Sukuk for Renewables Projects

The Islamic Development Bank indicated that it may issue green sukuk bonds compliant with religious law and increase lending for climate-related projects with an announcement at the United Nations global warming conference in Paris at the end of the year.
“Estimates for the 2030 agenda indicate that we need to move from billions to trillions of dollars of support annually for sustainable development,” Savas Alpay, chief economist of the IDB, said in a phone interview. “Traditional sources of development finance will not be enough. We must also look at non-traditional sources. We will be using Islamic finance to bring new resources to the table.”
Khazanah Nasional Bhd, Malaysia’s state-owned sovereign wealth fund, issued green sukuk last November after introducing guidelines for socially responsible debt in August 2014. It was the second entity after the London-based International Financial Facility for Immunization announce plans to sell ethical-based sukuk.
Green Sukuk

IDB's sukuk issuance fosters Islamic finance market growth

The Islamic Development Bank's (IDB) ordinary capital resources has increased its use of sukuk instruments, not only boosting its lending capacity but also promoting the global Islamic financial markets, Moody's Investors Service said in its report "Islamic Development Bank - Ordinary Capital Resources". The IDB currently has a long-term issuer rating of Aaa with a stable outlook. Despite increased leverage from sukuk issuance, the IDB benefits from a large and expanding capital base. because of the recent general capital increase. The debt-to-equity ratio is expected to rise to 125% in the coming years, a level still well below that of other Aaa-rated MDBs.

King & Spalding advises on largest Sukuk programme to date

King & Spalding has advised the Islamic Development Bank (IDB) on the establishment of a $25 billion Sukuk programme, triple listed on the London Stock Exchange, Nasdaq-Dubai and Bursa Malaysia. The programme is rated “AAA” by S&P and Fitch and “Aaa” by Moody’s. King & Spalding’s Kanji advised the IDB on the transaction with assistance from Dubai-based senior associate Hamed Afzal and Washington, D.C.-based transaction specialist Gina Bunker. The lead manager on the transaction was Standard Chartered Bank plc and dealers included CIMB, HSBC, National Bank of Abu Dhabi, Natixis and Standard Chartered Bank.

la côte d’Ivoire s’essaie à la finance islamique

La Cote d’Ivoire s’apprête, après l’Afrique du sud et le Sénégal, à souscrire son premier emprunt obligataire (Sukuk) en vue de mobiliser 350 milliards de FCFA (environ 534 millions d’euros). Le pays compte sur l’appui de la Banque Islamique de Développement (BID). En Côte d’Ivoire, le gouvernement travaille, en partenariat avec la Société islamique pour le développement du secteur privé (Sid), à l’élaboration d’un programme quinquennal de mobilisation de ressources sous forme de Sukuk. La première émission est prévue pour fin 2015.

IDB To Spend N20 Billion On Nigerian Education

The Islamic Development Bank is set to invest $98 million (N19.5bn) in the educational project which will be implemented in nine Nigerian states. Ahmad Ali, who led the bank executives to host the meeting with the Emir of Kano on Saturday, September 19, in Saudi Arabia, said that this project had been successful in Niger and Chad republics where the Madrasa and Quranic schools were worked upon in such a way that it facilitated the graduates of the schools to enrol in public schools. The establishment of this program will help Nigeria overcome some of its education challenges like illiteracy. He said the board of the bank has approved the investment and is awaiting the final approval from Nigerian authorities.

Iraq to seek up to $500 million in loans from Islamic Development Bank

Iraq will seek up to $500 million in loans from the Jeddah-based Islamic Development Bank (IDB) to help cover its projected deficit, complementing the country's return to the international debt market, according to the bond's prospectus. Baghdad wants to raise up to $6 billion in a series of dollar-denominated bonds, Iraq's first in nine years, to fund salaries as well as infrastructure projects in the oil and gas, electricity and transportation sectors.

Jokowi Discusses Infrastructure Funding, Shariah Banking with Islamic Development Bank

President Joko Widodo has laid out his invitation for increased foreign investment in Indonesia before the Islamic Development Bank, which already has sizeable interests in the country. Joko, on a tour of the Middle East, met with Jeddah-based IDB president Ahmad Mohamed Ali to discuss a wide range of topics, from ways to finance infrastructure projects and increase investment by Middle East countries into Indonesia, to expanding the nation’s Islamic banking industry. The IDB currently finances nearly $4.2 billion in development projects in Indonesia. The group is also processing a member-country partnership strategy with Indonesia for the 2015-2019 period.

Islamic Investment Infrastructure Bank (IIIB) Moves Closer to Launch

The Islamic Investment Infrastructure Bank, a unit of the Jeddah based Islamic Development Bank (IDB) is expected to be founded in 2016 as a new cross-border institution jointly by the IDB, Indonesia and Turkey. The bank will act to raise funds by means of sukuk issuances to fund infrastructure projects. The bank’s founding members will invite other countries to join as shareholders. Indonesia is also among the 57 prospective founding members of the China-led Asian Infrastructure Investment Bank (AIIB) founded in late 2014. This international financial institution has been regarded as China’s strategy to reduce the influence of the International Monetary Fund (IMF), Asian Development Bank (ADB) and World Bank.

Primary education: IDB to construct 300 schools in AJK

The Islamic Development Bank (IDB) will construct 300 schools across Azad Jammu and Kashmir (AJK) to promote primary education in far-flung areas. IDB Programmed Head Shafat Hussain told a meeting of the AJK Planning and Development Department here on Sunday that besides constructing schools in remote areas, teachers of these institutes will also be provided special training. Hussain told the meeting that the project aimed to provide better education facilities to deserving children in far-flung and distant areas. AJK Director Education Syeda Geelani, Director Research Najeebur Rehman and other officials attended the meeting.

AFC gets $50m form Islamic Development Bank for project financing

Africa Finance Corporation (AFC) has announced its acceptance of a US$50 million 15 year line of financing, with a 13 year six month repayment period, from the Islamic Development Bank (IDB). The funds will be used to finance projects located across the numerous African IDB member countries. The projects will be structured in a way that is compliant with Islamic Finance, focusing particularly on infrastructural and agricultural projects that promote the economic and social development of the communities concerned. AFC’s agreement with the IDB also establishes an intercontinental relationship, which may lead to further collaboration between African and Middle Eastern institutions in the future.

Saudi’s Islamic Development Bank announces Scholarships

The Islamic Development Bank has announced Scholarships in order to improve the socioeconomic
conditions of the Muslim Communities in Non-Member Countries (including India) around the world to promote professional education among the Muslim community. Students must have secured minimum marks in certain subjects and examinations. They may not be older than 24 years and not in receipt of any other scholarship. The scholarship will only be granted if the students or their parents are financially weak and unable to pay for his/her education. Students benefiting from this scholarship must undertake to serve their community and country on completion of their studies.

Islamic Development Bank announces $150 billion over next 15 years to fund Sustainable Development G

The Islamic Development Bank (IsDB) announced that it will increase its funding of SDG related activities through its ten year strategy framework, from $80 billion recorded during the MDGs, to $150 billion over the next 15 years (2016-2030). IsDB made the announcement on the sidelines of the United Nations’ Third International Conference on Financing for Development, in Addis Ababa 13-16 July. Islamic finance can serve as a strong and non-traditional source of financing the Sustainable Development Goals (SDGs) according to global experts speaking during a seminar organised by the IsDB. Johannes Majewski, Program Coordinator, GIZ, the German Corporation extolled the strength of Islamic finance through its emphasis on asset based financing and its focus on common welfare.

Elvira Nabiullina met the President of the Islamic Development bank in the Central Bank of Russia

Ahmed Mohammed Ali Al-Madani came for the visit with the head of Russian Central bank Elvira Nabiullina, being accompanied by the President of the Republic of Tatarstan Rustam Minnikhanov. The trip has been organized within the framework of the visit of the Islamic Development bank (IDB) head to the VII International Economic summit of Russia and OIC countries – KazanSummit 2015. During the meeting, Ahmed Mohammed Ali Al-Madani told about the history of the IDB and the principles of its operation. He noted that today Islamic banking is represented even in countries, where there is no Islam, for instance, in China.

President of the Islamic Development Bank was awarded the title of Honorary Professor of the Russian Islamic University

The rector of the Russian Islamic Institute (RII) Raffick Mukhametshin awarded the degree of honorary professor, a gown and a diploma to Dr. Ahmad Mohamed Ali Al Madani, the President of the Islamic Development Bank. The ceremony was held in the framework of the Strategic Forum of the VII International economic summit of Russia and the OIC - KazanSummit 2015. Ahmad Mohamed Ali Al Madani arrived to Kazan to participate in the VII International Economic Summit Of Russia and OIC countries and became a guest of Honor of the annual KazanSummit. Head of the Islamic Bank delivered a speech at the Strategic Forum of the summit.

Fitch Affirms Islamic Development Bank at ‘AAA'; Outlook Stable

Fitch Ratings has affirmed the Islamic Development Bank (IsDB)’s Long-term Issuer Default Rating (IDR)’s at ‘AAA’ with a Stable Outlook. The Short-term IDR has been affirmed at F1+. The trust certificates issued by IDB Trust Services Ltd and guaranteed by IsDB have also been affirmed at ‘AAA’. The ratings reflect its strong capitalisation, high liquidity and low concentration risk compared with other regional multilateral development banks (MDBs). Even though some limits, such as leverage, have been relaxed, the risk framework remains stringent, and IsDB is progressively aligning it with that of other highly rated MDBs, for example through its liquidity policy. However, compared with other ‘AAA’-rated MDBs, provisioning is fairly low given the bank’s exposure to countries experiencing deep political troubles.

Muhith urges IDB to come out of traditional financing

Finance Minister of Bangladesh AMA Muhith has urged governors of the Islamic Development Bank (IDB) to push for a community-based partnership and come out of traditional financing models for a prosperous Islamic world. Muhith suggested leaders of the Islamic countries should work together to pull up the OIC (Organisation of Islamic Cooperation) region towards achieving healthy human development and securing strong, sustainable economic growth. He was speaking to OIC leaders at the 40th annual meeting of the Islamic Development Bank Group at Maputo, Mozambique. Currently, IDB's support for low-income members is stymied by not just a lack of adequate development funds but by its relatively higher cost as well, Muhith said.

Islamic Bank: Microfinance will help alleviate poverty worldwide

Microfinance is a well-developed strategy to alleviate poverty around the world, Islamic Development Bank (IDB) President Ahmad Mohamed Ali said Monday. Speaking at the forum of "Exploring Innovative Solutions for Affordable Islamic Microfinance on the sidelines of the 40th Annual meeting IDB, Ali emphasized that microfinance is a rapidly growing market. Ali said that a number of challenges confront efforts for microfinance by Islamic banks today. These include the need for coordinating policy and direction, weakness in regulatory and supervisory environments, lack of awareness and education about Islamic finance, and a severe shortage of qualified and trained human capital.

Islamic Bank: Microfinance will help alleviate poverty

Microfinance is a well-developed strategy to alleviate poverty around the world, Islamic Development Bank (IDB) President Ahmad Mohamed Ali said Monday. Speaking at the forum of "Exploring Innovative Solutions for Affordable Islamic Microfinance on the sidelines of the 40th Annual meeting IDB, Ali emphasized that microfinance is a rapidly growing market. Ali said that a number of challenges confront efforts for microfinance by Islamic banks today. These include the need for coordinating policy and direction, weakness in regulatory and supervisory environments, lack of awareness and education about Islamic finance, and a severe shortage of qualified and trained human capital.

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