The International Islamic Trade Finance Corporation (ITFC) and the Islamic Solidarity Fund for Development (ISFD) have signed a US$150 million trade finance support program for their least developed member countries (LDMCs) affected by the food security crisis.
The Mudarabah agreement will also see the ISFD and the ITFC, both of whom are under the IsDB Group, jointly contribute to providing financial support to SMEs as well as meet the LDMCs’ medical supply needs through sovereign trade finance.
Under the current phase of the program, the LDMCs which will benefit from the program are Benin, Burkina Faso, The Gambia, Mali, Senegal, Sierra Leone, Togo, Chad, Comoros, Djibouti, Mauritania and Uganda. With 25 LDMCs and 12 members slated to benefit from the program in the current stage, it has the potential to double its reach in terms of member country beneficiaries.
According to Dr Hiba Ahmed, the director-general of the ISFD, the newly established program strengthens the economic resilience of IsDB member countries through empowering youth, women and MSMEs.
“This program presents an innovative approach in addressing one important dimension of the multidimensional aspects of poverty,” Dr Hiba added.
As part of its efforts toward addressing the food security crisis among member countries, the ITFC adopted an agri-strategic initiative to increase the share of financing channeled toward the agricultural and food sectors. The ITFC increased its financing 2.4 times year-on-year in 2021.
The ISFD, launched in 2007 as a Waqf entity, previously collaborated with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the export credit and investment insurance arm of the IsDB Group, in 2020 to launch the ICIEC–ISFD COVID-19 Emergency Response Initiative.
The initiative provided US$400 million in grant funding to member countries to meet their import needs of medicine, medical equipment and other essential commodities.