The announcement was made at the fifth round of ITFC’s board meeting, which is taking place in Dubai on December 1-2, 2007. The meetings are being attended by His Excellency Dr. Ahmad Mohamed Ali, President of the IDB Group and Chairman of ITFC Board; ITFC Board Members and Dr. Walid Al Wohaib, CEO of ITFC;
The meeting will discuss a number of pertinent issues and reports related to the operational setup and working plans of the corporation especially in order to formerly launch its operational activities as per the agreed to deadline of January 10, 2008 (01/01/1429H). Furthermore the board meeting will hear from Dr. Waleed Al Wohaib on the Corporation’s functional objectives for 1428H (2008) during which the ITFC is expected to fine-tune and begin the phased implementation of its trade financing and trade promotion activities in member countries thus helping them enhance their export capabilities and developmental objectives.
Dr. Waleed Al Wohaib said “the ITFC was established in order to increase the trade volume from the current 14% to 20% in intra trade among member countries by 2015, in addition to consolidating all of IDB’s trade finance activities under a single umbrella thus eliminating the overlapping and bringing greater efficiency to the delivery of trade finance services:. He further added; “the ITFC will promote and facilitate intra-trade among member countries, alone or in cooperation with other providers of funds, utilizing such financial instruments that are Shariah Compliant and which the entity deems appropriate.”
It is worth mentioning that as far as IDB’s efforts in the area of trade finance are concerned, IDB has been undertaking trade finance business activities as far back as 1977G under what was then reformed to as the Import Trade Financing Operations Programme (ITFO), established to finance the import financing needs of member countries. Total trade finance approvals recorded since the inception of IDB are in excess of US$25 billion, and in the last five years, approvals have been consistently in excess of US$2 billion per annum.”
About the Islamic Development Bank (IDB)
The Islamic Development Bank (IDB) is an intentional financial institution established in pursuance of the Declaration of Intent issued by the Conference of Finance Ministers of Muslim Countries held in Jeddah in Dhul Qadah 1393H (December 1973). The IDB’s principal office is in Jeddah, the Kingdom of Saudi Arabia. Three regional offices were opened in Rabat; Morocco; Kuala Lumpur, Malaysia; and Almaty Kazakhstan. The IDB is in the process of opening its fourth regional office in Dakar, Senegal.
The purpose of the IDB is to foster the economic development and social progress of member countries and Muslim communities in non-member countries individually as well as jointly in accordance with the principles of Shari’ah (Islamic Law).
The functions of the IDB are to provide various forms of development assistance for poverty alleviation through human development, forging economic cooperation through promotion of trade and investment among member countries, and enhancing the role of Islamic finance in the social and economic development of member countries. The IDB is also required to establish and operate special funds for specific purposes including a fund for assistance to Muslim countries in non-member countries, in addition to setting up trust funds.
Pursuant to the decision of the Board of Governors in their 31st Annual Meeting held in Kuwait in Jumad Awwal 1427H (May 2006), the Authorized Capital of the IDB was increased from ID15 billion to ID30 billion. The issued Capital of the IDB was increased from ID8.1 billion to ID15 billion. Out of this, the Subscribed Capital was increased from ID8 billion to ID13.2 billion. The Paid-up Capital of the IDB as of the end-1427H was ID2.81 billion. (1 ID = 1 SDR: Special Drawing Rights of the IMF)
About the International Islamic Trade Finance Corporation (ITFC)
Establishment of the International Islamic Trade Finance Corporation (ITFC) was approved by the Bank’s Board of Governors during its 29th Annual Meeting held in Putrajaya, Malaysia in 2005. The corporation enjoys the status of an international organization and has its headquarters in Jeddah, Kingdom of Saudi Arabia and its first branch will in Dubai, UAE. The ITFC has an Authorized Capital of US$3 billion and an initial Subscribed Capital of US$750 million and will be a private-sector driven autonomous trade entity within the IDB Group. It was established with the aim of providing the necessary inputs to accelerate the growth of intra-trade among OIC countries from its current 14% to 20% by 2015.