The Islamic Development Bank Group
Together We Build a Better Future
Islamic Finance Seminar, Sao Paulo, Brazil, October 4, 2010
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 Vision
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1440H (2020)
Structure
Products and Services
Portfolio and Activity Highlights
Cooperation with other Institutions
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“ By the Year 1440H (2020) IDB shall have
become a world-class development
bank, inspired by Islamic principles, that
has helped significantly transform the
landscape of comprehensive human
development in the Muslim world and
helped restore its dignity.”
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“We are committed to alleviating
poverty, promoting human
development, science & technology,
and Islamic banking & finance, and
enhancing cooperation among
member countries, in collaboration
with development partners”
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The Strategic Challenges Confronting
the Muslim World :
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Achieving healthy human development
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Securing strong and sustainable
economic growth
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Promoting good governance
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Strengthening peace and stability
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Fostering a powerful sense of common
identity, consciousness, and empathy
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Restoring the Image of Islam and the
Muslim world
Source: AHDR
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IDB: Six Priority Areas
 Human Development
 Agriculture Development and Food Security
 Infrastructure Development
 Intra-trade Among Member Countries
 Private Sector Development
 Research and Development in Islamic Economics,
Banking and Finance
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Integration of IDB MCs Economies
Improving the Image of the Muslim World
Key Strategic Thrusts
Universalizing Education
Alleviating Poverty
Expanding Islamic Financial Industry
Empowering Women
Promoting Health
Prospering the People
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Vision 1440H (2020)
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Structure
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Products and Services
Portfolio and Activity Highlights
Cooperation with other Institutions
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Islamic
Development
Bank (IDB)
Islamic
Corporation for
Insurance of
Investment &
Export Credit
(ICIEC)
Islamic
Corporation
for the
Development
of the Private
Sector (ICD)
IDB
Group
Islamic
Research &
Training
Institute (IRTI)
International
Islamic Trade
Financing
Corporation
(ITFC)
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Definition of Key Terminology
Principles of Islamic Shari’ah Governing Islamic Finance:
 Prohibition of Interest (Riba) in all financial transactions
 Prohibition of deception, incomplete disclosure of
information and sale of prohibited items and gambling, etc
 Speculation and excessive leveraging is forbidden
 All transactions are based on real assets
 Entitlement to return is due to liability of loss and vice versa
 Unlawful earnings , expenditures or fraud is prohibited
 Dealings are based on trust, honesty and integrity
Islamic Dinar (ID):
 The Unit of Account of IDB, which is equivalent to One
Special Drawing Rights (SDR) of the International Monetary
Fund (IMF)
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Islamic Development Bank
(IDB)
•
Established in 1975 to foster socio-economic
development in member countries and Muslim
communities in compliance with Shari’ah.
• Authorized capital of US$ 45 billion
•
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Subscribed capital of US$ 22 billion
• Paid-up capital of US$ 5.3 billion
AAA rating by Moody’s Investors Service, Fitch
Ratings, Standard & Poors.
• Zero-Risk Rating by the European Parliament
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Islamic Research & Training Institute
(IRTI)
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Established in 1981 to undertake applied & basic
research in Islamic Economics and Finance.
Activities include:
Research Seminars & Conferences
Training Courses
Publications
IDB Prize in Islamic Economics, Banking &
Finance
• IRTI Scholarship for PhD in Islamic Banking
•
•
•
•
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Islamic Corporation for Insurance of
Investment & Export Credit
(ICIEC)
•
Established in 1994 to provide Shari’ah-compatible
export credit insurance, political risk insurance, technical
assistance.
o Capital Structure (66.7% IDB, 33.3% MCs) : Total
authorized capital US$ 231 million, subscribed capital
US$ 228 million
o Business Insured in 2009 : over US$ 1 billion
o Cumulatively, as of December 2009 :
- Business Insured US$ 6.35 billion
- in more than 37 member countries
• Insurance Financial Strength Rating of Aa3 by Moody’s
Investors Service
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Islamic Corporation for the Development
of the Private Sector (ICD)
o Established in 1999 & commenced its operation in July 2000
o Mandated to promote private sector development and to offer
o
o
o
o
advisory services to the private sector entities in member
countries.
An authorized capital of US$ 2 billion, paid up capital of
US$ 470 million.
47 Islamic Countries are members of which 21 are in Africa.
Capital Structure (50% IDB, 30% MCs, 20% Financial
Institutions).
As of December 2009, cumulative business :
- Approvals : 185 Projects amounting to US$ 1.59 billion
- in more than 32 member countries
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International Islamic Trade Financing
Corporation (ITFC)
•
Commenced business activities in January 2008.
It promotes and enhances intra-trade and trade
cooperation among 57 member countries of the
Organization of Islamic Conference (OIC) through trade
financing and promotion programs;
•
Authorized Capital : US$ 3.0 billion
•
Subscribed Capital : US$ 750 million
•
Managing Funds for other institutions : US$ 1.0 billion
•
Year 2009 Trade Finance Approvals : US$ 2.1 billion
•
Cumulatively Trade Financing, end 2009 : US$ 4.6 billion
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Group
Shari’ah
Board
BOARD OF
GOVERNORS
BOARD OF EXECUTIVE
DIRECTORS
General Council
Group
Ombudsman
IDB
President
Group Integrity
Officer
Group
Operations
Evaluation
Group Internal
Audit
Group Risk
Management
Group Strategic
Planning
World Waqf
Foundation
VP
(Fin.)
IDB
Organizational
Structure
VP
(Opr.)
VP
(Corp
Serv.)
Chief
Econ.
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IDB Regional Offices
Almaty
Kazakhstan
Dakar,
Senegal
Regional
Offices
Kuala
Lumpur,
Malaysia
Rabat,
Morocco
In addition, there are currently 12 Field
Representatives in some countries
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Europe: 2
Asia: 26
Africa: 27
Latin America: 1
• A Unique Model of South-South Cooperation
• 56 members spreading over 4 continents
• 22 countries in 1975 → 56 countries in 2009
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Indonesia, 2.7
Saudi Arabia,
24.44
Others, 10.07
Pakistan, 3.05
Algeria, 3.05
Kuwait, 6.54
Libya, 9.81
UAE, 6.94
Iran, 8.58
Turkey, 7.73
Egypt, 8.48
Qatar, 8.61
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Vision 1440H (2020)
Structure
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Products and Services
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Portfolio and Activity Highlights
IDB Group Reform
Cooperation with other Institutions & the
African Development Bank
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Financing of Projects (Public and Private)
Promoting the Islamic Financial Industry
Trade Finance and Promotion
Capacity Building and Technical Cooperation
Risk Insurance
Research and Training
Fund/ Assets Management
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NGOs and Women-In-Development (WID)
Scholarship Programs
Science & Technology Program
Investment Promotion Technical Assistance Program
(ITAP)
Trade Cooperation & Promotion Program (TCPP)
Special Assistance
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Technical Cooperation Program (TCP)
 Capacity Development (exchange of experts, training, etc.)
 Supporting civil societies through NGOs
 Supporting women-in-development initiatives
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Investment Promotion Technical Assistance Program (ITAP)
 Promote Intra-Investment among OIC MCs
 Capacity Building of Investment Promotion Agencies
 Dissemination of Investment opportunities
 Investment Information Network
 Intra-Investment Statistics on MCs
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Trade Cooperation & Promotion Program (TCPP)
 Exhibitions, Trade Fairs and Buyers-sellers Meetings
 Capacity Building of Export Promotion Agencies
 Consultative Meeting on Aid-for-Trade
 Promote regional Cooperation
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- Special Assistance and Scholarships
•Provide
Relief & Alleviation of suffering in case of natural disasters
•Support development of Muslim minorities in non-MCs
•Scholarships for Muslim communities in non-MCs.
•M.Sc. Program for the Least Developed Member Countries
•Merit Scholarship Programs for High Technology
- Science and Technology Program
•Capacity
development in areas of Science and Technology
•Inter-Islamic S&T Network
•IDB Prize for Science & Technology to Promote Excellence in
Research & Development
•Self Reliance in Vaccine Production
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Interest-Free Loan
Leasing
Installment Sale
Construction Finance (Istisna’a)
Equity
Line of Financing
Technical Assistance (Loan & Grant)
Murabaha (Trade Financing)
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The Islamic Development Bank Group:
Current Areas of Intervention
Financing of
Developing the Trade Financing
Projects (Public Islamic Financial and Promotion
and Private)
Industry
of Cooperation
Agriculture
Equity
Infrastructure participation in
Islamic financial
Industry
institutions
Education
Developing
Health
Regulatory
SMEs,
framework
microfinancing Research and
Other sectors training
IDB/ICD
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IDB/ICD
Financing
imports
Financing
exports
Promoting
trade
cooperation
ITFC
Capacity Building
Disseminating
of
skills (exchange of
experts, training, etc.)
Supporting civil
societies through
NGOs
Supporting womenin-development
initiatives
IDB/IRTI
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The Islamic Development Bank Group:
Current Areas of Intervention (Cont’d)
Risk
Insurance
Country risk
 Short- and
medium-term
commercial
risks
 Coverage of
banks for Islamic
financing
products

ICIEC
Research and
Asset
Training
Management
Islamic
banking and
finance
Islamic
economics
Training in
related fields

IRTI
Special Assistance
and Scholarships
Awqaf assets  Support to Muslim
minorities in non-MCs
Investment
portfolios
Alleviation of natural
disasters
Equity funds
Venture capital Scholarships for
Muslim communities
funds
in non-MCs.
Merit Scholarship
Programs
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IDB/ICD
IDB
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Vision 1440H (2020)
Structure
Products and Services
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Portfolio and Activity Highlights
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Cooperation with other Institutions
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Type of Operation
US$ billion
1- Development Projects
28.14
2- Technical Assistance
0.29
3- Trade Operations
34.78
4- Special Assistance
0.68
TOTAL
63.90
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Special Assistance,
$ 0.7 bn, (1%)
Projects, $ 28.14
bn, (44%)
Trade, $ 34.78 bn,
(54%)
Net Cum. End 2009 = US$ 63.90 billion
Technical
Assistance, $ 0.29
bn, (1%)
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8,000
Cumulative
$ 63.9 billion
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1975
1980
1985
1990
1995
2000
2005
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2009
Total Operations Plan : US$ 3.72 billion
- US$ 39 million Grants Financing
- US$ 381 million Concessional Loans
- US$ 3.30 billion Ordinary Financing
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Rural electrification, power generation & distribution
Transport (highways and roads) and telecom
Microfinance capacity building and lines of finance
Dams, irrigation, water supply
Agricultural and rural development projects
Industry, petroleum & gas
Primary and secondary education
Higher education (engineering and medical)
Health centers, rural hospitals, specialized facilities
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Investments in Islamic Banks & Financial Institutions
Capacity Building for Islamic Banks
Introduction and Dissemination of Islamic Modes of
Financing, and Developing Knowledge
Developing the architectural foundation of the
Islamic financial Industry, by establishing and
supporting crucial institutions
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Accounting & Auditing Org. for Islamic Financial
Institutions (AAOIFI)-1991
General Council for Islamic Banks and Financial
Institutions (CIBAFI)-2001
International Islamic Financial Market (IIFM)-2002
Islamic Financial Services Board (IFSB)-2002
Liquidity Management Centre (LMC)-2002
International Islamic Rating Agency (IIRA)-2002
International Islamic Centre for Reconciliation &
Arbitration (IICRA)-2005
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A dedicated facility to fight poverty
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Launched - IDB BOG Annual Meeting (Dakar 2007)
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Target Endowment of US$ 10 billion
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Current IDB and MCs contribution of US$ 2.6 billion
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Two Pilot Programs already approved:
 Vocational Literacy (VOLIP)
 Microfinance Support (MFSP)
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Vision 1440H (2020)
Structure
Products and Services
Portfolio and Activity Highlights
Cooperation with other Institutions
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Vision 1440H (2020)
Structure
Products and Services
Portfolio and Activity Highlights
Cooperation with other International
Institutions
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Multilateral Financing Institutions
(WB; AfDB; ADB; EIB; EBRD; etc.)
Regional & International Organizations (IMF; IFAD;
FAO; UN; UNDP; UNEP; WHO; WMO; UNESCO;
GCC; etc.)
National Financing Institutions / Bilateral Funding
Agencies (DFID, JICA, JBIC; KFW; AFD; GTZ; IDRC;
CIDA; SIDA; NORAD; etc.)
Arab Coordination Group
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A Strategic Partner
for
Development
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Thank you