MICROCAPITAL STORY: $10b Islamic Solidarity Fund for Development (ISFD) Releases First Annual Report Including Details of its Microfinance Support Program (MFSP) Worth $500m

The Islamic Solidarity Fund for Development (ISFD), a program of the Islamic Development Bank (IDB), has released its first annual report. The report describes the first year as being spent setting the basic foundations for the ISFD including establishing procedures and developing guidelines. The original target of the fund was USD 10 billion with contributions to be made by IDB and IDB member countries. As at the end of 2008 USD 2.61 billion had been pledged. This comprised of USD 1.61 billion from 36 member countries and USD 1 billion from the IDB. Saudi Arabia had committed USD 1 billion, Kuwait USD 300 million and Iran USD 100 million. MicroCapital first reported on the launch of this fund in March 2008.

The objectives of the IFSD are to eliminate poverty, reduce illiteracy and fight contagious diseases throughout the IDB member states. These support the United Nations Millennium Development Goals. To achieve its objectives the ISFD Five-Year Strategy emphasizes two thematic programs – the Vocational Literacy Program (VOLIP) and the Microfinance Support Program (MFSP). The total cost of each program is estimated to be USD 500 million of which the ISFD will contribute at least USD 100 million. The MFSP program is aimed at creating employment opportunities and improving living conditions. It works with existing ISD microfinance programs and is closely tied to the VOLIP program as families that participate in this are given priority access to microfinance in the MFSP program.

The Islamic Development Bank (IDB), a multilateral development financing institution, was founded in 1975 and has its headquarters in Jeddah, Saudi Arabia. The ISD currently has 56 member countries and accepts deposits and mobilizes financial resources in accordance with Shari’ah, or Islamic Law. Total Assets as at the end of 2007 were Islamic Dinar (ID) 6,107.4 million. In 2008 the ISFD contributed USD 320.3 million, or 33.8 percent, to the total cost of all projects (USD 948.3 million). This represented 26 programs in 18 countries, of which 16 were in sub-Saharan Africa.

By Sally Levy, Research Assistant

Additional Resources:

Saudi Gazette: First ISFD annual report released

MicroCapital Story: $10b Islamic Solidarity Fund for Development Programs Approved with Goals to Reduce Illiteracy and Poverty throughout the Muslim World Focused on Microfinance

Islamic Development Bank (IDB): Home

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