Line Of Finance
One of ICD’s core focus areas is to establish and develop Shariah Compliant Financial Channels in our member countries to promote Islamic Finance, support the private sector, and eradicate poverty.
ICD’s Lines of Financing are extended to promote the growth and development of the private sector and promote Islamic finance or other purposes authorized by ICD’s Articles of Agreement and Investment Policies.
Line of Financing is an arrangement through which ICD extends medium-long term financing Facilities to Financial institutions (FI) with the purpose of supporting private sector enterprises operating in ICD’s Member Countries.
Such Lines of Finance are extended directly to eligible beneficiary FIs or are channeled through selected intermediary FIs to eligible private sector enterprises. It is instructive to note ICD’s flexibility in cooperating with Islamic as well as conventional institutions who are ready to accept our partnership criteria.
ICD’s Lines of Financing act as means to improve the access of private sector enterprises to medium-long term funding and concurrently strengthening the balance sheet position of the beneficiary FIs. Enterprises related to the Defense Sector and Recreation as well as non-Shariah compliant activities cannot be financed under ICD’s Lines of Finance.
ICD has designed a variety of products that can be utilized by both Islamic and Conventional FIs while different structures have been designed for different types of FIs (banks and non-banks). ICD is actively developing new products and structures to meet the needs and expectations of its partners and clients and in many cases, has been able to successfully tailor Shariah-compliant facilities (Wakala, Murabaha, Commodity Murabaha, or any other Shariah-compliant instrument) that meet local regulatory requirements and satisfy specific needs of its clients.
ICD aims to expand its outreach and multiply its developmental impact through a partnership with the financial institutions operating in its member countries by leveraging on local knowledge and network of the beneficiary/intermediary financial institutions. A diversified portfolio of the projects financed under ICD’s Lines of Finance is based on the Shariah objective and in line with at least the United Nations Sustainable Development Goals (SDGs) 8&9.
In brief, the main objectives of Lines of Financing include but are not limited to:
- Promotion of Islamic finance and financial inclusion;
- Expansion of outreach and multiplying the developmental impact of ICD;
- Partnership development with FIs and benefiting from their network and market knowledge.
- Facilitating access of private sector enterprises to medium-long term financing;
- Reducing unemployment in ICD’s member countries;
- Strengthening the financial position of the beneficiary/intermediary FIs.