Islamic finance body sets up fund on coronavirus impact

The Islamic Development Bank (IsDB Group) is setting up a special $730 million fund to mitigate the negative health and socioeconomic impact of the COVID-19 pandemic.

The IsDB Group said on Monday that global supply chain disruptions, demand compression, and macroeconomic instability will have severe economic growth and poverty fallout on member countries, if not managed appropriately.

The Strategic Preparedness and Response Facility fund is meant to ease the adverse impacts of coronavirus, according to a bank statement.

The fund will include $280 million from the Bank and Islamic Solidarity Fund for Development for sovereign projects and programs, $300 million from the International Islamic Trade Finance Corporation (ITFC) for trade finance, and $150 million from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) for insurance coverage.

"Financing will be extended in the form of grants, concessional resources, trade finance, private sector lending, and political and risk insurance coverage," the group said.

The IsDB Group will deploy all available financing instruments to channel the funds on the fast track to support its member countries, it added.

"The facility will extend financing to both the public and private sector in minimizing the spread and impact of the pandemic in IsDB member countries and to build their resilience," it said.

The IsDB Group is also planning to invest in research and development and provide technical assistance support for developing innovative solutions for preventing and containing the pandemic under its Science, Technology and Innovation Program.

The IsDB Group’s entities will support the private sector in responding to the crisis and minimizing its impact on SMEs to sustain economic development.

The rapid response package will be to the tune of $300 million, enabling the revival of trade and sustenance of supply chains in strategically important sectors.