1 the islamic development bank group together we build a better future islamic finance seminar, sao...
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The Islamic Development Bank The Islamic Development Bank GroupGroup
Together We Build a Better FutureTogether We Build a Better Future
Islamic Finance Seminar, Sao Paulo, Brazil, October 4, 2010
Vision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights Cooperation with other Institutions
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“ “ By the Year 1440H (2020) IDB By the Year 1440H (2020) IDB shall have become a world-class shall have become a world-class development bank, inspired by development bank, inspired by Islamic principles, that has helped Islamic principles, that has helped significantly transform the significantly transform the landscape of comprehensive landscape of comprehensive human development in the Muslim human development in the Muslim world and helped restore its world and helped restore its dignity.”dignity.”
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Source: AHDR
““We are committed to We are committed to
alleviating poverty, alleviating poverty,
promoting human promoting human
development, science & development, science &
technology, and Islamic technology, and Islamic
banking & finance, and banking & finance, and
enhancing cooperation among enhancing cooperation among
member countries, member countries, in in
collaboration with collaboration with
development partners”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
The Strategic Challenges Confronting The Strategic Challenges Confronting the Muslim Worldthe Muslim World: :
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Human DevelopmentHuman Development
Agriculture Development and Food SecurityAgriculture Development and Food Security
Infrastructure DevelopmentInfrastructure Development
Intra-trade Among Member CountriesIntra-trade Among Member Countries
Private Sector DevelopmentPrivate Sector Development
Research and Development in Islamic Research and Development in Islamic Economics, Banking and FinanceEconomics, Banking and Finance
IDB: Six Priority AreasIDB: Six Priority Areas
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Improving the Image of the Muslim World Integration of IDB MCs Economies
Universalizing Education Empowering Women
Alleviating Poverty Promoting Health
Expanding Islamic Financial Industry Prospering the People
Key Strategic Thrusts
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Vision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights Cooperation with other Institutions
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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 integrityIslamic 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
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• 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
Islamic Development BankIslamic Development Bank (IDB)(IDB)
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• Established in 1981 to undertake Established in 1981 to undertake applied & basic research in Islamic applied & basic research in Islamic Economics and Finance. Activities Economics and Finance. Activities include:include:• Research Seminars & Conferences• Training Courses• Publications• IDB Prize in Islamic Economics,
Banking & Finance• IRTI Scholarship for PhD in Islamic
Banking
Islamic Research & Training Islamic Research & Training Institute (IRTI)Institute (IRTI)
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• 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 over US$ 1 billionbillion
o Cumulatively, as of December 2009 : - Business Insured US$ 6.35 billionUS$ 6.35 billion- in more than 37 member countries37 member countries
• Insurance Financial Strength Rating of Aa3 by Moody’s Investors Service
Islamic Corporation for Islamic Corporation for Insurance of Investment & Insurance of Investment &
Export Credit (ICIEC)Export Credit (ICIEC)
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o Established in 1999 & commenced its operation in July 2000
o Mandated to promote private sector development and to offer advisory services to the private sector entities in member countries.
o An authorized capital of US$ 2 billion, paid up capital of US$ 470 million.
o 47 Islamic Countries are members of which 21 are in Africa.
o Capital Structure (50% IDB, 30% MCs, 20% Financial Institutions).
o As of December 2009, cumulative business : - Approvals : 185 Projects 185 Projects amounting to US$ US$ 1.59 billion1.59 billion- in more than 32 member countries32 member countries
Islamic Corporation for the Islamic Corporation for the Development Development
of the Private Sector (ICD)of the Private Sector (ICD)
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• 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
International Islamic Trade International Islamic Trade Financing Corporation (ITFC)Financing Corporation (ITFC)
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IDBPreside
nt
BOARD OF GOVERNORS
BOARD OF EXECUTIVE DIRECTORS
IDB Organizational Structure
IDB Organizational Structure
VP(Fin.)
Chief
Econ.
VP(Opr.)
VP(CorpServ.
)
Group Internal Audit
Group Strategic Planning
Group Risk Management
World Waqf Foundation
Group Integrity Officer
General Council
Group Ombudsman
Group Operations Evaluation
Group Shari’ah Board
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IDB Regional OfficesIDB Regional OfficesIDB Regional OfficesIDB Regional Offices
In addition, there are currently 12 In addition, there are currently 12 Field Representatives in some Field Representatives in some
countriescountries
Regional
Offices
Almaty Kazakhst
an
Kuala Lumpur, Malaysia
Dakar, Senegal
Rabat, Morocco
18• 22 countries in 1975 → 56 countries in 2009• 22 countries in 1975 → 56 countries in 2009
• A Unique Model of South-South Cooperation
Africa: 27
Asia: 26Europe: 2
Latin America: 1
• 56 members spreading over 4 continents
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Vision 1440H (2020) Structure Products and Services 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
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
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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)
The Islamic Development Bank Group: The Islamic Development Bank Group: Current Areas of InterventionCurrent Areas of Intervention
Financing Financing of Projects of Projects (Public and (Public and
Private)Private)
Developing Developing the Islamic the Islamic Financial Financial IndustryIndustry
Trade Trade Financing Financing
and and Promotion Promotion
of of CooperationCooperation
Capacity Capacity BuildingBuilding
AgriculturAgricultureeInfrastructInfrastructureureIndustryIndustryEducationEducationHealthHealthSMEs, SMEs, microfinancmicrofinancingingOther Other sectorssectors
Equity Equity participation participation in Islamic in Islamic financial financial institutionsinstitutionsDeveloping Developing Regulatory Regulatory frameworkframeworkResearch Research and trainingand training
Financing Financing importsimportsFinancing Financing exportsexportsPromoting Promoting trade trade cooperationcooperation
Disseminating Disseminating of skills of skills (exchange of (exchange of experts, training, experts, training, etc.)etc.)Supporting civil Supporting civil societies through societies through NGOsNGOsSupporting Supporting women-in-women-in-development development initiativesinitiatives
IDB/ICD IDB/ICD ITFC IDB/IRTI26
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The Islamic Development Bank Group:The Islamic Development Bank Group:
Current Areas of InterventionCurrent Areas of Intervention (Cont’d)(Cont’d)
Risk Risk
InsuranceInsuranceResearch Research
and and TrainingTraining
Asset Asset ManagemManagem
ent ent
Special Special AssistanceAssistance
and and ScholarshipsScholarships
Country Country riskrisk Short- and Short- and medium-medium-term term commercial commercial risksrisks Coverage Coverage of banks for of banks for Islamic Islamic financing financing productsproducts
Islamic Islamic banking and banking and financefinanceIslamic Islamic economicseconomicsTraining in Training in related related fieldsfields
Awqaf Awqaf assetsassetsInvestment Investment portfoliosportfoliosEquity Equity fundsfundsVenture Venture capital capital fundsfunds
Support to Support to Muslim Muslim minorities in non-minorities in non-MCsMCsAlleviation of Alleviation of natural disastersnatural disastersScholarships for Scholarships for Muslim Muslim communities in communities in non-MCs.non-MCs.Merit Merit Scholarship Scholarship ProgramsPrograms
ICIEC IRTI IDB/ICD IDB27
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Vision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights Cooperation with other Institutions
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Type of OperationUS$ billion
1 -Development Projects28.14
2 -Technical Assistance0.29
3 -Trade Operations34.78
4 -Special Assistance0.68
TOTAL 63.90
Net Cum. End 2009 = US$ 63.90 billionNet Cum. End 2009 = US$ 63.90 billion
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Cumulativebillion 63.9 $
Cumulative $ 63.9 billion
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
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)
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 A Strategic Partner
for for
DevelopmentDevelopment
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Thank youThank you