THE ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE SECTOR AND LEASING GROUP SIGN KAZAKHSTAN TENGE-DENOMINATED DEAL IN EQUIVALENT OF US$5 MILLION TO BOOST SMEs IN KAZAKHSTAN
Jeddah, May 11th, 2023 - Islamic Corporation for the Development of the Private Sector (ICD) and JSC “Leasing Group” (LG) signed an agreement in relation to the Kazakhstan Tenge (KZT) denominated line of finance facility (LoF) equivalent of US$5 million to support private sector businesses, especially small and medium-sized enterprises (SMEs), in Kazakhstan. It is symbolic that the LoF agreement was signed on the sidelines of the IsDB Group Private Sector Forum held in Jeddah, Saudi Arabia during 11th – 13th May 2023.
ICD, rated 'A+' by Fitch Ratings, established its second sukuk programme in June 2021, which is a multicurrency programme dedicated to local currency issuance. This is part of ICD’s resource mobilization program to support the ICD’s LoF operations in Kazakhstan and develop the private sector in the country. Institutional investors in Kazakhstan have expressed preliminary interest to participate in the first tranche of the Kazakhstan Tenge (KZT) Sukuk issuance. The proceeds of the Sukuk will be deployed to extend LoF’s to financial institutions (FIs) and non-banking financial institutions (NBFIs) operating in Kazakhstan for the development of the private sector. Both deployment and repayments will be denominated in KZT.
This transaction (ICD’s local currency Sukuk issuance and LoF operation) is the first of its kind for ICD and can be replicated in other member countries, giving ICD the capability of funding in local currency. Consequently, the successful implementation and closing of this transaction will pave the way for ICD to expand its reach in its member countries.
The LoF agreement was signed by Eng. Hani Salem Sonbol, the Acting Chief Executive Officer of ICD, and Mr. Arsen Subbotin, Chairman of the Management Board of LG. The funds will be used by LG to provide Shari’ah-compliant financing in the national currency of Kazakhstan to eligible private sector enterprises across various sectors of the economy.
“This transaction is a testament to our successful partnership with Leasing Group, which will be instrumental in supporting private sector development in Kazakhstan through this landmark local-currency denominated Line of Financing (LOF) funded by the ICD’s KZT-denominated Sukuk Programme. We are delighted that the ICD’s KZT-denominated Sukuk will contribute to the development of the capital markets, while the underlying LOF facility to Leasing Group will support the private sector and promote Islamic finance / financial inclusion in the country,” said Eng. Hani Salem Sonbol.
“We appreciate ICD’s support and line of finance, which will enable us to continue providing much-needed support to private sector businesses in Kazakhstan, especially SMEs” said Mr. Arsen Subbotin.
This LoF reinforces ICD’s commitment to promoting private sector development in its member countries and supporting Islamic finance worldwide, and Leasing Group’s dedication to economic growth and fostering financial inclusion in Kazakhstan. With this line of finance, ICD and Leasing Group are providing a boost to private sector businesses in Kazakhstan, particularly SMEs, which have a crucial role to play in the country’s growth and development.
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About ICD
The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral development financial institution and a member of the Islamic Development Bank (IsDB) Group. ICD was established in November 1999 to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship, providing advisory services to governments and private companies of its member countries, and encouraging cross-border investments.
ICD is Rated A2’ by Moody’s, ‘A-’ by S&P and, A+ by Fitch. ICD establishes and strengthens cooperation and partnership relationships with an aim to establish joint or collective financing. For more information on ICD visit: www.icd-ps.org.
About JSC "Leasing Group"
Joint-Stock Company “Leasing Group” (the Company) was established in 2005 in Almaty city, Kazakhstan. The Company focuses on leasing products and caters primarily small and medium-sized businesses operating across various industries. Since 2018 the Company has been listed on the Kazakhstan Stock Exchange (KASE). The registered office of the Company is located at 201 office, block «4B», business centre «Nurly-Tau», 17, Al Farabi Avenue, 050059, Almaty, The Republic of Kazakhstan. For more information visit the Company’s website at: https://lease.kz/