Products and Services

Advisory/Asset Management and Technical Assistant Grants

There is a significant need for core infrastructure development in IsDB Group member countries especially in the area of transportation, energy, telecommunications and industrial development.

Infrastructure and Privatization Advisory

There is a significant need for core infrastructure development in IsDB Group member countries especially in the area of transportation, energy, telecommunications and industrial development.

The Infrastructure and Privatization Advisory Program is positioned to advise on the development and financing of small and medium scale infrastructure projects (private sector or public private partnership projects) such as Independent Power Projects, Utilities, Telecommunication and Industry.

In addition, the IsDB Group capitalizes on the capacity to advice governments on both privatization strategy and specific privatization transactions in order to attract private sector investment into key sectors.

Sukuk & Capital Markets Advisory

The Sukuk and Capital Markets Program seeks to help member countries develop Islamic Capital Markets and Islamic Yield Curves, by advising member governments on issuing short-term and long-term Sukuk which will provide the banking sector with the needed liquid instruments to invest surplus capital. This will add to the flow of Sukuk issuance in member countries, which will help develop their debt capital markets and diversify the funding options that are available to these countries.  The program also works with the private sector to structure and distribute tradable Islamic instruments.

Industry and Business Environment Support Advisory

Through this program, the IDB Group seeks to support its member countries in the development of conducive enabling environment for business, improve firms’ competitiveness, enhance value chains, and promote industrialization in productive sectors.

Types of Services

  1. Technical Oversight
  2. Project Management and Monitoring
  3. Resource Mobilization and Financial Management

Islamic Financial Institutions Advisory

The Islamic Financial Institutions Development Program works on advising financial institutions on creating Islamic independent subsidiary/windows, converting conventional financial institutions into Islamic entities, and creating new Islamic banks/vehicles focused on the local markets especially small and medium enterprises.

Types of Services 

  1. Conversion/Establishment: Convert conventional financial institutions into Islamic ones or create an Islamic independent subsidiary/window (including banks, insurance companies, leasing companies, and mortgage companies.)
  2. Fund Raising/Advisory: Assist Islamic financial institutions in raising capital, restructure and merge with other institutions, and support the existing Islamic institutions to enhance their operational processes, boost their financial resources and diversify their products.
  3. Regulation: Advise governments to develop and implement new regulation and supervision system for Islamic financial institutions and assist these governments in enhancing & developing their existing Islamic financial system.
  4. Capacity Building: Includes identifying knowledge gaps, theoretical training & developments program, practical training in our financial institutions subsidiaries around the globe, and knowledge transfer & tools.

Income Funds and Capital Markets

Targeted at the promotion of Islamic finance and supporting the development and growth of private sector in various member countries through the deployment of capital into debt and capital markets.

The IsDB Group has launched fund vehicles that generate immediate returns to investors, paid on quarterly and semiannual basis. The types of fund includes trust fund, investment and money market.

Small and Medium Enterprises (SME)

Targeted at the development of the SME sector in specific member country/countries through the deployment of mezzanine capital into well-run small and mid-size companies.

These are country-specific or region specific mezzanine vehicles.

Private Equity

Targeted at making value-accretive contribution to the development of a specific and critical economic sector in the member countries through the deployment of equity and quasi-equity capital into select growth enterprises.

These are sector-specific equity and quasi-equity funds.

Equity Investments

The IsDB Group supports the economic development of its member countries through equity investments in companies seeking capital expansion or investment in funds.

The IsDB Group supports the economic development of its member countries through equity investments in companies seeking capital expansion or investment in funds. The direct equity investment covers selective Greenfield and Operating Companies investments that have a strong equity story with a potential of major development benefits. While the investments through funds covers various categories of funds such as infrastructure, private equity, leasing and income generating funds.

Types of equity investments:

  • Plain equity
  • Quasi-equity
  • Hybrids (Convertible)

The IsDB Group provides added value through active participation in the companies’ boards to support business effectiveness and corporate governance.

The IsDB Group also supports the establishment of Islamic banks and financial institutions through equity participation. Worldwide, the Bank has equity investment in more than 80 companies and funds in 29 countries, including one Islamic bank and a Takaful company in the Republic of Indonesia.

Insurance of Investment and Export Credit

The IsDB Group is a pioneer in the field of Sharia-compliant credit and political risk insurance and reinsurance.

The IsDB Group is a pioneer in the field of Sharia-compliant credit and political risk insurance and reinsurance. Aiming at increasing the scope of trade transactions of its member countries and facilitating Foreign Direct Investments (FDI) into the same countries, the IsDB Group provides appropriate Islamic Sharia-compatible credit and country risk insurance and reinsurance instruments.

The products and services provided include:

Trade Credit Insurance

Short-term Business

For banks providing financing facilities through Murabahah, Ijarah, Istisna’ or any other Islamic mode of finance, the IsDB Group can insure the credit risk of the obligor or its guarantor helping the bank to mitigate the risks and increase its asset size and improve its asset quality.

For banks and financial institutions confirming Letters of Credit (L/C) and want to increase the volume of business, the IsDB Group can share the credit risk of the issuing bank so that banks and financial institutions can build capacity for more L/C business and help their clients increase their exports.

For trading institutions who’s exports are paid for by Letters of Credit or/and sold on open account terms, the IsDB Group enables trading institutions to offer their overseas customers more flexible payment options – without exposing their business to non-payment and political risks. The IsDB Group insurance also allows trading institutions to obtain Export Credit finance from banks.

Services:

  • Bank Master Policy (BMP)
  • Documentary Credit Insurance Policy (DCIP)
  • Specific Transaction Policy (STP)
  • Comprehensive Short–Term Policy (CSTP)

Medium-term Business

For clients executing contracts abroad, the IsDB Group enhances their confidence to deal with new customers, penetrate new markets, and bid on large contracts by providing cover of up to 90% of eligible losses resulting from political and commercial risks while clients give their overseas clients more flexible payment terms.

Services:

  • Specific Transaction Policy (Contract Frustration)

Foreign Investment Insurance

For investors who are concerned about non-commercial risks such as “country/political risk” in the host countries. The political risk insurance helps potential investors mitigate these risks, and support their cross-border investments.

Services: 

  • Foreign Investment Insurance Policy (FIIP) for Equity
  • Foreign Investment Insurance Policy (FIIP) for Financing Facility
  • Non-Honoring of Sovereign Financial Obligation Policy

Export Credit Agencies (ECAs) /Reinsurance

Export credit agencies (ECAs) are specialized government institutions created to support export growth.  In some countries, the ECAs provide insurance and financing support. The IsDB Group provides reinsurance support to ECAs either in its member countries or elsewhere.

Services: 

  • Quota Share Treaty (QST)
  • Excess of Loss
  • Reinsurance of Domestic Business
  • Reinsurance Facultative Agreement (RFA)
  • Technical Assistance to Export Credit Agencies of Member Countries

Islamic Research and Training

The IsDB Group is considered to be one of the pioneers and key center of excellences around the world in promoting and supporting the development and sustenance of a dynamic and comprehensive Islamic Financial Services Industry (IFSI).

The IsDB Group is considered to be one of the pioneers and key center of excellences around the world in promoting and supporting the development and sustenance of a dynamic and comprehensive Islamic Financial Services Industry (IFSI), which supports the socio-economic development of member countries and Muslim communities.

The products and services in Islamic research and training includes;

Policy Dialogue

The IsDB Group conducts and facilitates policy dialogue with its member countries with the objective of helping them adopt efficient monetary and fiscal policies.  Additionally, the IsDB Group also assists member countries in building successful partnerships and alliances with key stakeholders for the IFSI in partnership with local, regional and international institutions engaged in IFSI.

Training

The IsDB Group is a leader in the creation and dissemination of knowledge in Islamic economics, banking and finance. It organizes conferences, seminars, training and workshops on the main topics of Islamic Banking and Finance, Private Sector Development, Human Resources Development and Islamic Macroeconomic. The IsDB Group’s sought-after practitioners and academics conduct numerous training programs every year. The training activities include, but not limited to the following:

  • Providing, in partnership with other training institutes and universities, programs for training trainers.
  • Developing training packages for repeatable seminars and creating programs through country level training institutes or member country personnel.
  • Compiling progress evaluation reports for courses, seminars and workshops to improve programs.
  • Conducting Distance Learning Courses in Islamic Economics and Islamic Finance (basic and intermediate levels).
  • Operating online Master’s Program in Islamic Finance and Banking in collaboration with Insaniah University College (IUC) Malaysia.

Research

The IsDB Group is a catalyst in the advancement of the Islamic Finance and Islamic Economics.  From its inception, the IsDB Group has been:

  • Conducting and coordinating basic and applied research to develop models and methods for the application of Islamic economics, banking and finance in the modern world.
  • Carrying out microeconomic studies on economic behavior and decision making in Islamic Finance.
  • Leading institutional and economics research to assess strategies for the development of Islamic Financial Services Industry (IFSI).
  • Conducting research to assess the differential risk characteristics of Islamic vs. Conventional finance, and policies to promote monetary and financial stability with the help of Islamic finance.
  • Undertaking research in the practical aspects of Zakat and Awqaf and their role in IFSI development.
  • Developing institutions in member and non-member countries to carry out research.
  • Partnering with academic and research institutions at the country, OIC and global levels.
  • Conducting research in the area of Sharia.

Publications

For more than two decades, the IsDB Group has been producing a whole range of literature on Islamic economics, banking and finance in English, Arabic and French, and has developed a number of databases in these fields. The IsDB Group employs world renowned authors in the Islamic Finance, Islamic Economics, Sharia, and Awqaf to name just a few.

Knowledge Dissemination

For more than two decades, the IsDB Group has been collecting data from the Islamic financial institutions, converting the data into knowledge for the purpose of developing the industry. The knowledge dissemination efforts are appreciated by researchers, investors, credit agencies, academic, regulatory agencies, students and the general public. The IsDB Group’s knowledge dissemination activities include, but not limited to the following:

  • Creation of the Islamic Banks Information System (IBIS) to collect and analyze financial information of all Islamic financial institutions.
  • Development of database such as:
    • Awqaf database
    • Zakat database
    • Takaful database
    • Who-is-Who database in the area of Islamic Finance, economics and Sharia
    • Fatawa database
  • Organization and modernization programs for specialized groups in member countries, including networking of experts, consultants, contractors and business persons.

Inspiration programs 

Apart from providing support to academic and training institutions through sponsorship and co-organizing various events, the IsDB Group seeks to directly influence the process of knowledge building and dissemination through several programs and schemes, such as, scholarships and research grants programs, visiting scholar schemes and annual prizes for the benefits of distinguished scholars of Islamic economics and banking for their seminal contribution to the field.

Project and Corporate Finance

The IsDB Group supports projects and businesses that benefit a greater majority of people and create beneficiaries able to support and sustain the local economy.

The IsDB Group supports projects and businesses that benefit a greater majority of people and create beneficiaries able to support and sustain the local economy. These approaches are the basis of the IsDB priorities.

Public Sector

The IsDB Group provides long-term sovereign lending products to support its member countries’ development plans. The IsDB Group focuses on areas including but not limited to:

  1. Infrastructure: power generation & supply, water supply, transport and sanitation
  2. Human development: education, healthcare, research and technology
  3. Agriculture: agro-processing, irrigation and crop development, marketing and storage facilities, microcredit schemes, etc.

Public-Private Partnership

The IsDB Group supports Public-Private Partnership (PPP) as the preferred mode of investment globally for major infrastructure projects requiring sizeable investments. The IsDB Group’s focus sectors for PPP include Industrial, Power, Infrastructure and Communication.

Private Sector

The IsDB Group supports the private sector by providing long-range of financing options for different sectors. Types of projects financed include:

  1. Greenfield projects, focusing on infrastructure, ICT and industrial sectors
  2. Expansion of operational projects
  3. Asset financing
  4. Corporate financing
  5. Working Capital
  6. Line of Financing

Examples of Sharia modes of financing used by the IsDB Group include:

  1. Istisna’
  2. Instalment Sale
  3. Murabahah
  4. Ijarah (leasing)
  5. Service Ijarah

South-South Cooperation

Developing countries have acquired considerable experience, expertise and knowledge in different areas over the last decades.

Developing countries have acquired considerable experience, expertise and knowledge in different areas over the last decades. As a result, they are increasingly interested in sharing their experiences, and learning from one another in order to accelerate the development process, and to overcome their challenges.

The IsDB Group, as the only multilateral development bank whose membership is drawn entirely from developing countries, has been encouraging cooperation and knowledge sharing amongst its member countries. Based on its in-depth experience in promoting South-South Cooperation, the IsDB Group introduced the ‘Reverse Linkage’ in order to maximize the benefits derived from South-South Cooperation and adequately address the emerging demands of its member countries.

Reverse Linkage is a South-South cooperation mechanism whereby member countries serve among themselves as the primary and forefront agents in the provision of knowledge, technology and resources to build their individual capacities and devise solutions for their autonomous development in a mutually beneficial, results-oriented and program-based arrangement.

By enhancing solidarity and forging partnerships amongst the IsDB Group member countries, Reverse Linkage has the overarching objective of capacity development through the transfer knowledge, technology and resources. IsDB Group plays the role of a connector and a catalyst by matching the specific capacity needs of its member countries with capacities available in other member countries, and by supporting them in their aspirations to learn from one another.

Scholarships

With the motto of ‘Developing the Ummah Worldwide’, the IsDB Group has been providing and implementing its scholarship programs including:

This Program was launched in 1998 with the objective to assist IsDB Least Developed Member Countries (LDMCs) in the development of their human capital especially in science and technology.

This Program began in 1992 for advanced studies and/or research (3-year PhD and 6-12-month Post-Doctorate) in selected applied science and high technology areas deemed necessary for the development of the member countries.

This Program was launched in 1983 to enable Muslim students from the Muslim communities in non-member countries to undertake undergraduate studies in medicine, engineering, agriculture and other related fields mainly in their own countries.

Trade Finance and Promotion of Intra-Trade

Trade is vital to the global economy, especially to IsDB Group member countries.

Trade is vital to the global economy, especially to IsDB Group member countries.

The IsDB Group supports trade finance with different modes of financing since trade finance is vital to the global economy, especially to IsDB Group member countries. Trade finance is generally a short term program in nature with a working capital cycle of 12-36 months period.

Modes of financing:

  1. Murabahah
  2. Istisna’
  3. Salam

Within these modes of financing, the IsDB Group provides various services such as:

  1. Trade financing: Import or Export Financing
  2. Warehouse financing
  3. Account receivables financing with assignment of receivables
  4. Lines of financing to local banks

These services are available for:

  1. Government and Government-owned entities
  2. Private sector companies, manufacturers and traders
  3. Local banks

Trade Promotion

The IsDB Group also provides trade-related technical assistance on trade promotion and facilitation to member countries. The principal objective is to promote and enhance intra-trade and trade cooperation among member countries and to complement the efforts of trade financing in this regard.