The UAE is bidding to host the first branch of the International Islamic Trade Finance Corporation, a major lender to companies and governments involved in trade deals across the Islamic world.
UAE bids to host Islamic trade lender branch
The UAE is bidding to host the first branch of the International Islamic Trade Finance Corporation (ITFC), a major lender to companies and governments involved in trade deals across the Islamic world.
The effort comes as the Islamic Development Bank (IDB), the parent organisation of the ITFC, seeks to encourage closer working among its various financial arms. The UAE already hosts the regional office of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), another unit of the bank.
Officials from the Ministry of Finance presented their bid this week at the IDB's board of governors meeting in Khartoum.
"The UAE's bid to host the first branch for ITFC comes with an aim of finding some sort of integration among the financial institutions of IDB," said Khalid Al Bustani, the assistant undersecretary of international financial relations at the Ministry of Finance. "The integration provides a strong Islamic financing structure for projects supported by the bank, especially when examining the evolution of economic and management relations of the UAE markets."
The ITFC, based in Saudi Arabia, funded US$3.03 billion (Dh11.13bn) of deals last year, 19 per cent more than the year before. Typically, it provides funding in compliance with Islamic law to governments and firms trading in agricultural and energy products.
Last month, it signed a deal with the Egyptian government to provide a $1.2bn credit facility to help the country import wheat, other foods and oil.
The ITFC has already moved towards closer coordination with the ICIEC, with the latter insuring trade deals brokered by the ITFC. But officials want to take greater steps towards cooperation.
"There's a sense that we can do more if we take a joint approach," said Owais Diyan, the head of operations in the Dubai office of ICIEC. "The needs of our member countries are huge and there's only so many resources to go around."
The UAE is a sensible choice for hosting a branch of the ITFC, say Ministry of Finance officials. Since opening last year, the Dubai office of the ICIEC has helped to secure a growing number of deals. Officials also hope the UAE's position as a re-export centre for the region and globally will help the country's chances of hosting the lender.
A decision on the branch is likely in the next few days as the meeting concludes.
The ITFC has a mandate to work in all 57 member countries of the Organisation of Islamic Cooperation but actively operates in 38 member countries and works with 19 banks.