DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
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More recently, ADB has also initiated analysis aimed at linking the availability of trade finance
to the creation of economic value and to the demand for human resources (ADB Survey, 2013).
In addition to fulfilling individual mandates, several IFIs have opted to work toward alignment
of their respective trade finance programs, with a view to enhancing efficiency and consistency
for various stakeholders seeking to deal with international financial institutions.
“IFC has helped make good progress toward establishing a single standard for MDB
support for trade finance. One of the original objectives of the program was to help
standardize the approach to trade finance among MDBs. A more uniform approach to
trade finance would provide advantages to commercial banks in terms of time and cost
savings, easier communication, and multiple solutions to getting more difficult
transactions done. Substantial progress toward this objective has been made. The GTFP
itself was based on EBRD’s model. IFC subsequently helped other MDBs, including the
Asian Development Bank and the African Development Bank, establish their trade
finance programs. Each MDB trade finance program is based on”
Source: World Bank Independent Evaluation Group: IFC GTFP Evaluation, 2013
The International Islamic Trade Finance Corporation (ITFC), likewise, mirrors other IFIs in its
mandate and scope of operations, with several distinctive characteristics. ITFC naturally
focuses on the provision of Shari’ah-compliant trade finance and structured trade finance
solutions, and does so explicitly with a view to supporting trade involving OIC Member States,
as well as specifically, trade flows between OIC Member States.
ITFC aims to “…serve as a catalyst for economic solidarity by establishing new trade
links with member countries, creating an environment that is conducive to on-going,
direct trade relationships, and strengthens corresponding banking networks among
member countries.”
Source: ITFC Website
The ITFC notably also aims to reduce the cost of trade financing for companies operating in
OIC Member States – an objective that addresses both the commercial realities of high-cost
financing, and the objectives of IFIs in supporting international development among their
member nations.
The Islamic Corporation for the Insurance of Investment and Export Credits (ICIEC) is the
Islamic Development Bank-owned credit and insurance agency based in the Kingdom of Saudi
Arabia, established in 1994, currently the only ECA that provides export and investment
insurance solutions that are fully Shari’ah compliant. The ICIEC is a member of various
industry associations, including the Berne Union.
The ICIEC combines a risk mitigation proposition related to both trade and investment activity,
supporting intra-OIC trade flows and also seeking to enable and encourage inward investment
into OIC Member States, on the basis of Shari’ah compliant structures and practices.
The scope and mandate of the ICIEC is consistent with recent developments in international
activity, where traditional distinctions between trade and investment have given way to a