Evaluation of a Pan-Islamic Investment Banking: The Case of ICD
Ali Soliman:
Banking
June 2016
Finance
The aim of this Case Study is to examine the experience of the Islamic Corporation for the Development of the Private Sector (ICD), a subsidiary of the Islamic Development Bank, IsDB, in Jeddah. ICD was incorporated in Nov. 1999 after the model of the World Bank’s International Financial Corporation (IFC). The uniqueness of ICD is that it is the first attempt to create a multilateral financial institution that operates in the Organization of Islamic Countries (OIC), and offers Islamic finance to the private sector. A unique feature of ICD’s was that it was fully conceived, promoted and managed by LDC professionals. In addition it operates mostly in countries with very low access to international capital markets and with low credit ratings. In this case the IsDB took upon itself to create a new entity that competes with local private sector banks. In this respect, IsDB responded to latent demand in member countries. ICD was exposed to market forces as it had to offer credit to private sector projects without government guarantees.
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