ICD through the Islamic Financial Institutions (IFI) Program is advising the Libyan Ministry of Economy to set up catalyst entities (i.e. 5 SME Banks) to encourage the creation of small and medium enterprises (SMEs) in Libya. The SME Banks will introduce the venture capital culture to the Libyan market by participating in the capital of SMEs. They will also partner and share the risk with commercial banks via co-financing the SMEs. To hedge the credit risk and encourage the commercial banks to increase their exposure to SMEs, an Islamic insurance facility will be introduced with the objective of encouraging banks to finance the SMEs sectors. The finance mechanisms should help contribute to Libya’s economic development and diversification by way of employment, stability and innovation by helping to create job opportunities for the youth and also new finance opportunities.