Islamic Development Bank takes next step in supporting Islamic finance in Azerbaijan

Islamic Development Bank takes next step in supporting Islamic finance in Azerbaijan

The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank Group (IDB), has consolidated its support of Islamic finance in the Central Asian region by signing a new agreement with leading Azerbaijani microfinance institution VisionFund AzerCredit (VF AzerCredit).

The objective of the agreement is to provide advisory services with the aim of developing a comprehensive sharia-compliant microfinance solution for the country, the ICD said in a written statement on Feb. 9.

“The VF AzerCredit agreement represents the latest step in the ICD’s comprehensive program to support and develop the growth of the private sector in one of the most promising new regions of the Islamic global economy,” said the statement.

Vision Fund AzerCredit was established in 1996 as a program of World Vision Azerbaijan, a relief organization created to provide credit to underprivileged people, the statement added. In 2002, VF AzerCredit was registered as a Limited Liability Company in Azerbaijan, after which it obtained a central banking license in 2003. Its work emphasizes the provision of loans to small and micro entrepreneurs in rural areas, especially remote regions that remain largely unbanked, through 45 outlets in 38 districts.

The statement said the group had more than 80,000 borrowers and a portfolio of over $83 million, making it one of the leading figures in the Azerbaijani microfinance field and the partner for the private sector investment activities of the ICD.

The ICD is one of the primary drivers of Islamic finance and private sector growth in the Central Asian region, and has conducted a number of previous projects in Azerbaijan. As of 2014, the ICD had invested over $99.3 million in Azerbaijan’s economy.