Islamic Corporation for the Development of the Private Sector (ICD) signs two MoUs in Washington DC
The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IsDB), and the Small Enterprise Assistance Funds (SEAF), a US-based international financial institution mandated to promote economic development and positive local impact through investment in entrepreneurial activities in emerging markets, have signed a Memorandum of Understanding (MoU) to enter into a joint strategic collaboration. Separately, the ICD also signed an MoU with the Japan International Cooperation Agency (JICA) to set out a framework for collaboration in the development of the Islamic finance industry. In particular, ICD and JICA will cooperate in supporting the development of the Islamic money market and international capital market for the countries of common interest.
The MoU with SEAF aims to foster the development of small and medium sized enterprises (SMEs) through the deployment of Shariah compliant risk capital and financing. Supporting this, the two partners plan to establish country-focused SME funds in emerging and frontier markets of common interest, to encourage and promote private sector growth.
The funds will focus on providing development and expansion capital to established SMEs with high-growth potential in their respective markets; and will be mandated towards high impact and commercially viable investments in the SME sector using multiple instruments including equity, quasi-equity, term finance and other financing products.
The MoU with JICA includes the establishment of a platform for international dialogue on Islamic finance as a potential tool for inclusive and sustainable growth.
Kunio Okamura, JICA’s Senior Special Advisor, said, “We are glad to sign the MOU with IDB Group in the field of Islamic finance following the one signed for the Palestine Assistance. Partnering with ICD, We are ready to utilize the Islamic finance for the inclusive and sustainable growth for the ICD’s member countries. Technical Assistance for Sukuk issuance would be our very first cooperation. We are keen to implement the project incorporating Japanese financial institutions, which ultimately would achieve awareness-raising and penetration of the Islamic Finance in Japan for the better interaction of ICD’s member countries and Japan.”
Commenting on the two agreements, ICD Chief Executive Officer, Khaled Al Aboodi, said, “The collaboration between ICD and SEAF represents a promising step forward in the enhanced relationship between global markets, which will facilitate not only valuable information exchange but improved cross-border collaboration for capacity-building in the private sector across our key focus markets,” and on the subject of capacity building in Islamic finance in Japan he said, “By creating an Islamic money market, the country would be able to provide an alternative to its treasury bills for Islamic Financial Institutions to invest in. Even though such area is not commercially viable for global Sukuk arrangers, we took responsibility to fill this gap in the market which naturally falls within the developmental principals of ICD.”
