EDB and ICD signs MoU to promote SME growth in Bahrain
The Bahrain Economic Development Board (EDB) and the Islamic Corporation for the Development of the Private Sector (ICD), the private-sector arm of the Islamic Development Bank (IDB), signed a Memorandum of Understanding (MOU) to promote SME growth in Bahrain by providing support, Sharia compliant products, and training.
Under the terms of the joint partnership, the ICD will establish a world class Islamic Ijara Company in Bahrain to help SMEs succeed by offering Sharia-compliant financing products. The proposed Ijara Company will also be used as a training centre to help Bahrainis in the area of Islamic finance.
In addition, ICD plans to set up a software development centre in Bahrain to develop software solutions for Ijara, Takaful, Mortgage and Islamic Banking, for export to the international market. Moreover, the ICD will assess the feasibility of establishing an SME Fund in partnership with the EDB, with the aim of supporting and investing in SMEs based in Bahrain.
Commenting on the MOU, H.E. Kamal bin Ahmed, Minister of Transportation and Acting Chief Executive of the Bahrain EDB, said, “We are delighted to announce this partnership that will provide a significant boost to the Islamic finance sector, not just in Bahrain but in all ICD member countries and beyond. Bahrain currently plays host to one of the largest concentration of Islamic financial institutions in the world, and the new Ijara Company will add to the wide range of Sharia compliant products and services on offer, particularly for SMEs. Bahrain is already home to a number of independent organisations all committed to the development of the sector. Central to this is our education system which has enabled the Kingdom to boast one of the most highly skilled workforce in the region. The new training on offer as a result of this agreement will further reinforce Bahrain’s status as a knowledge hub for the Islamic finance industry.”
During the signing ceremony Mr Khaled Al-Aboodi, the CEO of ICD, said, “As one of the leaders of the Islamic finance industry, Bahrain was an obvious partner for these exciting new projects. Not only is Bahrain the ideal location from which SMEs, both Bahraini and international, can launch new ventures to access the Gulf region’s fast economic growth, but the Kingdom’s strong business regulatory environment provides the support and expertise required for new and growing businesses in the Islamic finance industry.”
Islamic banking has already taken off internationally, and Islamic finance banking assets are expected to have reached $1.7 trillion at the end of 2013, suggesting an annual growth of 17.6% over last four years. Bahrain is widely recognised as a global leader in Islamic finance, playing host to a number of organisations committed to the development of Islamic finance, including the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), the International Islamic Financial Market (IIFM), the General Council for Islamic Banks and Financial Institutions, the Islamic International Rating Agency (IIRA), the Thomson Reuters Global Islamic Finance Hub, and Deloitte’s Islamic Finance Knowledge Center, making the Kingdom a content and knowledge hub for the industry.
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Bahrain Economic Development Board