AI Issue 5 2017

Acquisition International - May 2017 59 Private Sector Investment in Islamic Countries • Create opportunity for growth and diversification; • Create opportunity to attract incremental capital to support future expected growth; • Create opportunity to attract strategic expertise from established Islamic financial institutions; • Create opportunity to attract Islamic investors looking to diversify geographically their portfolios; • Provide opportunity to generate capital gains/ value enhancements for the parent financial institution shareholders and; • Plan to extend finance to Infrastructure and PPP projects. Industry based challenges on the horizon Industry challenges vary by country and by intensity, but in general, most jurisdictions are facing problems due to a number of fairly similar factors. For example, just to name a few, the lack of skilled human capital and well-developed capital markets, the absence of financial integration both regionally and internationally, the poor capitalisation of Islamic financial institutions, the shortage of liquidity and cash management tools and the poor public awareness of Islamic finance products are all factors impeding Islamic finance growth. Seeing that ICD is a multilateral developmental financial institution, some of these challenges are inadvertently ours as well. The lack of financial intermediation facilities is what distinguishes poor countries from its richer counterparts in our opinion. To this end, ICD is enhancing economic development by providing a variety of Islamic financial services and products throughout its member countries. We have several academies in the pipeline designed to enhance knowledge of this fast-growing industry. The complex regional and international regulatory, economic and political context, and the growing need for scalable interventions to achieve meaningful developmental impact, requires broad- based co-operative efforts to ensure success and sustainability. ICD has been active in reaching out to governments and institutions, and devising new ways for cooperation and collaboration. Concluding thoughts ICD is working intensively to increase the availability and affordability of Islamic finance products for a wide range of financial institutions in its member countries. Extending Line of Finance (LOF) to financial institutions, providing advisory services and investing in various types of financial institutional equity for the ultimate benefit of local real sector businesses, have proven to be critical tools for ICD in boosting the private sector and combating poverty in its member countries.