17 May, 2017
The Islamic Development Bank (IDB) Group and the United Nations Development Program (UNDP) have launched a new report that spells out the potentials of Islamic finance in impact investment for the achievement of the Sustainable Development Goals (SDGs).
The report, titled “I for Impact: Blending Islamic Finance and Impact Investing for the Global Goals”, was launched by IDB President, Dr Bandar Hajjar, and UNDP Assistant Secretary General, Mr. Magdy Martínez-Solimán, on the sides of the 42ndAnnual Meeting of the IDB Group in Jeddah, Kingdom of Saudi Arabia.
It reviews recent developments and key factors for growth of Islamic finance and impact investing, and makes policy recommendations for development actors to leverage Islamic finance for impact investing as a way of fostering inclusive finance, curbing poverty, and achieving the SDGs.
The report was produced by a joint team of experts from the Islamic Research and Training Institute (IRTI) of the IDB Group and UNDP’s Istanbul International Center for Private Sector in Development.
Speaking during the launching, IRTI Director General, Prof. Mohamed Azmi Omar, said, “IDB Group and UNDP collaborated to produced this report in order to raise awareness of the compatibility between Islamic finance and impact investing. Islamic finance and impact investing are both based on ethical and social criteria, and emphasize inclusiveness. One of the key aims of the report is identifying areas of convergence of the two sectors and to develop collaborative strategies for achieving the global development agenda.”
The report said the scale and ambition of the SDGs call for substantial financial and technical resources, which are well beyond the scope of individual governments and the multilateral funding agencies.
Islamic finance, which witnessed a remarkable growth trajectory over the past decade, represents a strong potential source of financing for the SDGs, thereby fostering development and helping to end poverty especially in IDB member countries, which account for 40 percent of the world’s poor.
Given that impact investment is growing rapidly and has become an important source of funding the SDGs, a blending with Islamic finance provides a formable partnership that could play a significant role in achieving the SDGs.
The report therefore recommends:
To further these recommendations, IDB Group and UNDP have established the Global Islamic Finance and Impact Investing Platform (GIFIIP) to position Islamic finance impact investing as one of the leading enablers of SDGs implementation worldwide through private sector engagement.