Products and Services
Advisory/Asset Management and Technical Assistance
There is a significant need for core infrastructure development in IsDB Member Countries especially in the area of health, education, transport, energy, telecommunications and industrial development.
Enabling Environment Activities and Project Development
IsDB assists Member Countries in efforts aimed at improving their investment climates and enabling infrastructure investments, enhancing capital market efficiency, supporting competitiveness, and sustainable growth.
IsDB also engages transaction advisory services to develop and enhance bankable PPP projects, also undertakes policy level advisory activities and promotes knowledge sharing as well as networking platforms such as the IsDB Member Countries PPP Forum organized annually in different Member Countries with a view to highlighting the importance of PPPs as an alternative for procurement of infrastructure assets.
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- PPP- projects) such as Independent Power Projects, Utilities, Telecommunications and Industry.
In addition, the IsDB Group capitalizes on the capacity to advise governments on both privatization strategies 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 issuance of 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 IsDB 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
- Technical Oversight
- Project Management and Monitoring
- 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
- 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.)
- 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.
- 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.
- 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.
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.
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.
The IsDB Group provides added value through active participation in the companies’ boards to support business effectiveness and corporate governance.
It also supports the establishment of Islamic banks and financial institutions through equity participation. Worldwide, the Bank has equity investments in more than 80 companies and funds in 29 countries, including two participation banks in Turkey.
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.
A pioneer in the field of Sharia-compliant credit and political risk insurance and reinsurance, the IsDB Group aims at increasing the scope of trade transactions of its member countries and facilitating Foreign Direct Investments (FDI) into the same countries. It also provides appropriate Islamic Sharia-compatible credit and country risk insurance and reinsurance instruments.
The products and services provided include:
Trade Credit Insurance
For banks providing financing facilities through Murabahah, Ijarah, Istisna’ or any other Islamic modes 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 that are seeking to confirm Letters of Credit (L/Cs) and increase the volume of business, the IsDB Group can share the credit risk of the issuing bank so that banks and financial institutions may build further capacity for more L/C based businesses and help their clients increase their exports.
For trading institutions whose exports are paid for by L/Cs or/and sold on open account terms, the IsDB Group enables trading institutions to offer their overseas customers with more flexible payment options – without exposing their businesses to non-payment and political risks. The IsDB Group insurance also allows trading institutions to obtain Export Credit Finance from banks.
- Bank Master Policy (BMP)
- Documentary Credit Insurance Policy (DCIP)
- Specific Transaction Policy (STP)
- Comprehensive Short–Term Policy (CSTP)
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.
- Specific Transaction Policy (Contract Frustration)
Foreign Investment Insurance
For investors and potential with concerns 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.
- 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.
- 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 centers of excellence in the world for 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 centers of excellence in the world for 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;
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 assists member countries with building successful partnerships and alliances with key stakeholders for the IFSI in partnership with local, regional, and international institutions engaged in IFSI.
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 Macroeconomics. The IsDB Group’s sought-after practitioners and academics conduct numerous training programs every year. The training activities include(but are not limited to) the following:
- Providingprograms for training trainers in partnership with other training institutes and universities
- Developing training packages for high-profile seminars and creating programs through country level training institutes or member countries’ 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 Programs in Islamic Finance and Banking in collaboration with Insaniah University College (IUC), Malaysia.
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 economic 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 roles 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 Shari’a
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, Shari’a, and Awqaf.
For more than two decades, the IsDB Group has been collecting data from the Islamic financial institutions and 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 are 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 databases such as:
- Awqaf database
- Zakat database
- Takaful database
- “Who’sWho” database in the area of Islamic Finance, economics, and Shari’a
- Fatawa database
- Organization and modernization programs for specialized groups in member countries, including networking of experts, consultants, contractors, and business-persons
Apart from providing support to academic and training institutions through sponsorship and co-organizing various events, the IsDB Group seeks to directly encourage and accelerate the process of knowledge building and dissemination through several programs and schemes, such as, scholarships and research grants programs, visiting scholars schemes and annual prizes for the benefit of distinguished scholars of Islamic economics and banking worldwide 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 capable of supporting and sustaining local economies.
The IsDB Group supports projects and businesses that benefit a greater majority of people and create beneficiaries capable of supporting and sustaining the local economies. These approaches constitute the basis of IsDB Group’s priorities.
The IsDB Group provides long-term sovereign lending products to support its member countries’ development plans. It focuses on areas including but not limited to:
- Infrastructure: power generation & supply, water supply, transport and sanitation
- Human development: education, healthcare, research, and technology
- Industrial Transformation via Lines of Financing: SME supports through financial intermediaries
- Agriculture: agro-processing, irrigation and crop development, marketing and storage facilities, microcredit schemes, etc.
Public-Private Partnerships (PPPs)
The main objective of PPP operations is to promote economic development in Member Countries, while allowing IsDB to generate profit and demonstrate the financial viability of investments. Capitalizing on IsDB Group’s strengths, PPP operations’ primary focus is on infrastructure financing. Such financings encompass provision of long-term funds through Shari’a compliant modes to privately held, state-owned, or sub sovereign entities. The terms and conditions are discussed and negotiated individually and the transaction structures are agreed based on an optimized project and risk design.
The IsDB Group supports the private sector by providing a wide array of financing options for different sectors. Types of projects financed include (but are not limited to):
- Greenfield projects, focusing on infrastructure, ICT and industrial sectors
- Expansion of operational projects
- Asset financing
- Corporate financing
- Working Capital
- Lines of Financing
Examples of Shari’a modes of financing used by the IsDB Group include:
- Instalment Sale
- Ijarah (leasing)
- Service Ijarah
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 (MDB) 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 has 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 IsDB Group 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 of knowledge, technology and resources. The 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.
With the motto of ‘Developing the Ummah Worldwide’, the IsDB Group has been providing and implementing its scholarship programs including:
- M.Sc Scholarship Program in Science and Technology for IsDB Least Developed Member Countries (M.Sc.)
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:
Within these modes of financing, the IsDB Group provides various services such as:
- Trade financing: Import or Export Financing
- Warehouse financing
- Account receivables financing with assignment of receivables
- Lines of financing to local banks
These services are available for:
- Government and Government-owned entities
- Private sector companies, manufacturers and traders
- Local banks
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.