Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD) says it has extended a combined $50m to enable three Nigerian banks finance Small and Medium-scale Enterprises in the country.
According to Reuters, the multilateral body said it had signed $20m financing agreements with Wema Bank and Jaiz Bank; and another $10m for SunTrust Bank.
the ICD, the private sector arm of the Islamic Development Bank, has in recent years sought to expand its activities across Africa, home to a quarter of the world’s Muslims.
The funds would be extended to SMEs in sectors like health, communication, technology, manufacturing and agriculture, the ICD said.
The ICD has previously extended financing of $120 million for Nigerian businesses, while advising several African governments on their plans to issue Islamic bonds, including Senegal, Nigeria and the Ivory Coast.
A statement by the ICD Management noted “the small and medium sized enterprises (SMEs) have a crucial role to play in a country’s growth and development, and ICD has big plans for them. This is an important niche in all the member countries, especially in Africa. ICD is now focusing on increasing access to funding to the private sector by channeling the funds to established financial institutions in its member countries”.
The facility is coming days after Nigeria’s Finance Minister, Mrs. Kemi Adeosun urged ICD to initiate innovative financial products to fund the private sector.
Mrs Adeosun who spoke while declaring open the third edition of the Africa Islamic Finance Forum organised by the Federal Ministry of Finance in collaboration with the ICD in Lagos on Tuesday, also called on the ICD to establish a long-term commitment toward the economic development of member countries.
Represented by Aliyu Ahmed, the Director, Economics Relations Department Federal Ministry of Finance, Mrs Adeosun said the forum establishes a strong partnership for the development of the private sector, the largest employer of labour worldwide, and the engine of growth in the country.
She assured that the Federal Government would explore every available opportunity to achieve strong and sustainable economic development.
“This serves as a tool for providing innovative sources of investment and financing support to our governments, large corporations, Small and Medium Enterprises, SMEs, and our entrepreneurs.
“We expect that ICD would be able to demonstrate to us its capacity and capability to deliver on this front,” said Mrs Adeosun.
Speaking earlier, the Acting Chief Executive officer of ICD, Mohammed Anmari, said the forum was to promote Islamic finance as well as showcase the finances the organisation had been providing.
In his words, “it is like any other pool of capital available from both local and international resources and the difference is that Islamic finance is about risk sharing.
“This comes handy in times of economic crisis or downturns and increases the resilience of the financial sector,” said Mr Anmari.