The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of Islamic Development Bank (IDB) Group, in partnership with PT Mandala Multifinance TBK, an Indonesia-based company engaged in consumer financing, have signed a memorandum of understanding (MoU) in which ICD will offer its assistance in the carving out of Mandala’s Sharia’a business to a stand-alone Sharia’a compliant multi-finance company via ICD’s Islamic Finance Institution (IFI) program.

The Chief Executive Officer and General Manager of ICD, Mr. Khaled Al Aboodi, and the Chief Executive Officer and President of Mandala, Mr. Harryjanto Lasmana, signed the MoU on behalf of the two organizations in Jakarta, the Indonesian capital, at the sidelines of the Islamic Development Bank (IDB) Group 41stAnnual General Meeting in Jakarta on 19 May 2016.

The agreement outlines the parameters of ICD’s advisory services to Mandala and paves the way for the equity participation of ICD and its related entities in the newly-established company. The company is set to operate out of Indonesia. ICD has been one of the key financiers to Mandala for the past seven years and has successfully managed to bring its financial institution partners from the region as well as from the Middle East region to support Mandala’s ongoing business expansion.

During the signing ceremony, Mr. Khaled Al-Aboodi commented: “The Islamic Finance Institution (IFI) Program was launched as part of ICD’s mission to develop and promote Islamic financial institutions in member countries. I am convinced that ICD’s wealth of knowledge, experience and expertise in providing financial advisory and sound technical services will guarantee the successful transition of Mandala’s Sharia’a compliant business into a new Islamic multi-finance company which is up to global standards.”

Mr. Harryjanto said, “I am very pleased today to ink this agreement together with ICD, and Mandala remains grateful for the generous and timely support offered. ICD has been instrumental in Mandala’s rapid growth and the new Islamic unit will indeed add a new dimension to the business, especially seeing that it will attract investors from Middle Eastern financial institutions. Over the years, Islamic finance has notably served as a viable funding mechanism for various economic sectors, thus demonstrating its viability as an engine of growth. That said, I am convinced that the new unit will further create value for the Islamic finance industry. We look forward to a productive and fruitful collaboration.”