The International Islamic Trade Finance Corporation, member of the Islamic Development Bank Group, has launched a ‘Trade Development Fund’ with an initial target capital of $50m to support trade development projects in member countries of the Organisation of Islamic Cooperation and Muslim communities in non-member countries.
The fund is a Waqf, which from a Shariah perspective means endowed assets and restricting disposing of them, while the benefits are for charitable causes.
The fund, according to ITFC, will utilise investment returns for grants or concessional financing linked to the design and delivery of trade activities, raising awareness or knowledge sharing of trade-related issues and trade-related technical assistance.
A statement by the financial institution said, “The fund endowed resources will be invested in Shariah-compliant investments, with 50 per cent of returns allocated for operational purposes and the other 50 per cent going towards the principal to increase the fund. This operating model will enable the fund to grow over time as a sustainable funding platform.”
It disclosed that the fund had extended support to address the needs of member countries to fight the socio-economic effects of COVID-19, particularly with regards to the provision of food and essential medical supplies amongst others.
Commenting on the new fund, Hani Salem Sonbol, ITFC CEO, said: “The ITFC Trade Development Fund will enable us to go even further in providing charitable resources for the onward funding of trade-related initiatives and interventions to promote and develop trade within and between OIC member countries and also reach out to Muslim communities in non-OIC member countries, enhancing import-export trade activity across the Muslim world.”
In addition to the reinvestment of returns into the fund, future capital will also come from contributions by ITFC and member countries, institutions, and contributions from individuals in member and non-member countries.
