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The Islamic Development Bank Group Together We Build a Better Future. Islamic Finance Seminar, Sao Paulo, Brazil, October 4, 2010. Contents. Vision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights Cooperation with other Institutions. Vision 1440H ( 2020).

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The Islamic Development Bank Group

Together We Build a Better Future

Islamic Finance Seminar, Sao Paulo, Brazil, October 4, 2010


Contents
Contents

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • Cooperation with other Institutions


Vision 1440h 2020
Vision 1440H (2020)

“ 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.”

3


Mission statement
Mission Statement

  • “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”

Source: AHDR


Achieving healthy human development

Securing strong and sustainable economic growth

Promoting good governance

Strengthening peace and stability

Fostering a powerful sense of common identity, consciousness, and empathy

Restoring the Image of Islam and the Muslim world

Agenda for the Future: Responding to the Development Challenge of the Ummah (The IDB Vision 1440H & OIC 10 Year Plan of Action)

Source: AHDR

The Strategic Challenges Confronting the Muslim World :

5


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


Key Elements of IDB Group 2020 Vision

A Vision for Comprehensive Human Development

Integration of IDB MCs Economies

Improving the Image of the Muslim World

Key Strategic Thrusts

Universalizing Education

Empowering Women

Promoting Health

AlleviatingPoverty

Expanding Islamic Financial Industry

Prospering the People

7


Contents1
Contents

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • Cooperation with other Institutions



Islamic development bank
Islamic Development Bank

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)

Definition of Key Terminology

10


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

    • 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

11


Islamic Research & Training Institute (IRTI)

  • 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

12


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.

    • Capital Structure (66.7% IDB, 33.3% MCs) : Total authorized capital US$ 231 million, subscribed capital US$ 228 million

    • Business Insured in 2009 : over US$ 1 billion

    • 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

13


Islamic Corporation for the Development Credit (ICIEC)

of the Private Sector (ICD)

  • Established in 1999 & commenced its operation in July 2000

  • Mandated to promote private sector development and to offer 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

14


International Islamic Trade Financing Corporation (ITFC) Credit (ICIEC)

  • 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

15


IDB Credit (ICIEC)Organizational Structure

BOARD OF GOVERNORS

Group Shari’ah Board

Group Operations Evaluation

BOARD OF EXECUTIVE DIRECTORS

General Council

Group Internal Audit

Group Ombudsman

IDB

President

Group Risk Management

Group Integrity Officer

Group Strategic Planning

World Waqf Foundation

VP

(Fin.)

VP

(Opr.)

VP

(CorpServ.)

Chief Econ.


IDB Regional Offices Credit (ICIEC)

Almaty Kazakhstan

Dakar, Senegal

Regional Offices

Rabat, Morocco

Kuala Lumpur, Malaysia

In addition, there are currently 12 Field Representatives in some countries


Growth in idb membership
Growth in IDB Membership Credit (ICIEC)

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


Shareholders in idb as of subscribed capital
Shareholders in IDB Credit (ICIEC)(As % of Subscribed Capital)


Contents2
Contents Credit (ICIEC)

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • IDB Group Reform

  • Cooperation with other Institutions & the African Development Bank


Idb group products and services
IDB Group Products and Services Credit (ICIEC)

  • 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


Idb group special activities
IDB Group Special Activities Credit (ICIEC)

  • NGOs and Women-In-Development (WID)

  • Scholarship Programs

  • Science & Technology Program

  • Investment Promotion Technical Assistance Program (ITAP)

  • Trade Cooperation & Promotion Program (TCPP)

  • Special Assistance

22


Idb group special programs 1
IDB Group Special Programs (1) Credit (ICIEC)

  • Technical Cooperation Program (TCP)

    • Capacity Development (exchange of experts, training, etc.)

    • Supporting civil societies through NGOs

    • Supporting women-in-development initiatives

  • 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

  • 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

23


IDB Group Special Programs (2) Credit (ICIEC)

- 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


Modes of financing
Modes of Financing Credit (ICIEC)

  • Interest-Free Loan

  • Leasing

  • Installment Sale

  • Construction Finance (Istisna’a)

  • Equity

  • Line of Financing

  • Technical Assistance (Loan & Grant)

  • Murabaha (Trade Financing)


The Islamic Development Bank Group: Credit (ICIEC)Current Areas of Intervention

IDB/ICD

IDB/ICD

ITFC

IDB/IRTI

26


The Islamic Development Bank Group: Credit (ICIEC)Current Areas of Intervention(Cont’d)

ICIEC

IRTI

IDB/ICD

IDB

27


Contents3
Contents Credit (ICIEC)

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • Cooperation with other Institutions


Net approved financing idb group since inception to end 2009 not including icd iciec
Net Approved Credit (ICIEC)Financing IDB Group(Since Inception to End 2009) (Not Including ICD & ICIEC)


Approved idb group financing since inception to end 2009 us billion
Approved IDB Group Financing Credit (ICIEC)(Since Inception to End 2009) US$ billion

Net Cum. End 2009 = US$ 63.90 billion


Cumulative sectoral distribution projects tas from ocr
Cumulative Sectoral Distribution Credit (ICIEC)(Projects & TAs from OCR)


Idb group annual net approvals 1975 2009 us million
IDB GROUP ANNUAL NET APPROVALS Credit (ICIEC)(1975-2009) US$ million

Cumulative $ 63.9 billion


Operations plan op complex year 2010
OPERATIONS PLAN Credit (ICIEC)( OP Complex - Year 2010)

Total Operations Plan : US$ 3.72 billion

- US$ 39 million Grants Financing

- US$ 381 million Concessional Loans

- US$ 3.30 billion Ordinary Financing


Operational highlights
Operational Highlights Credit (ICIEC)

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


Supporting islamic finance
Supporting Islamic Finance Credit (ICIEC)

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


Supporting islamic financing
Supporting Islamic Financing Credit (ICIEC)

  • 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


Islamic solidarity fund for development isfd
Islamic Solidarity Fund for Development Credit (ICIEC)(ISFD)

  • A dedicated facility to fight poverty

  • Launched - IDB BOG Annual Meeting (Dakar 2007)

  • Target Endowment of US$ 10 billion

  • Current IDB and MCs contribution of US$ 2.6 billion

  • Two Pilot Programs already approved:

    • Vocational Literacy (VOLIP)

    • Microfinance Support (MFSP)


Contents4
Contents Credit (ICIEC)

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • Cooperation with other Institutions


Contents5
Contents Credit (ICIEC)

  • Vision 1440H (2020)

  • Structure

  • Products and Services

  • Portfolio and Activity Highlights

  • Cooperation with other International Institutions


Cooperation with other international institutions
Cooperation with Other International Institutions Credit (ICIEC)

  • 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


Islamic development bank group
Islamic Development Bank Group Credit (ICIEC)

A Strategic Partner

for

Development


Thank you Credit (ICIEC)

42


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