Islamic Development Bank Praised for its Roles in Supporting Islamic Banking in Turkey

President of the Republic of Turkey Recep Tayyip Erdogan on Friday attended the official opening of the International SMEs Conference, held within the framework of the G20 meetings taking place in Istanbul under the Turkish Presidency. The conference, which was attended by many international financial institutions, business owners, investors and Islamic finance leaders, was jointly organized by the World Bank, Islamic Development Bank (IDB) Group, Turkish Prime Ministry’s Under-secretariat for Treasury, as well as the country’s industrialists and businessmen’s association (TUMSIAD).

In his opening remarks, President Erdogan praised the role of the IDB Group in supporting the Islamic banking industry in Turkey, noting that the Group contributed this year US$ 570 million to finance two important projects i.e., the construction of the country’s Vakifbank, and provision of a credit line to the Export Credit Bank of Turkey to promote SMEs in Turkey and support their competitiveness in global markets.

Addressing the opening ceremony, the IDB Group President, Dr. Ahmad Mohamed Ali extended appreciation to the Turkish Presidency for having included on G20’s agenda the development of SMEs via Islamic finance. He further highlighted the significance being placed by policy makers across the globe on the pivotal role of SMEs through Islamic finance in enhancing economic growth and alleviating poverty. “SMEs create jobs and foster growth, contribute to political stability and make a significant dent on poverty in every country”, Dr. Ali reiterated adding: “statistics show that SMEs contribute to an estimated 43.5% of the total job opportunities created at international level, a figure that can increase to 57.8% worldwide.”

Leveraging Islamic Finance for SMEs

Elsewhere, the IDB Group President commended the Islamic Research and Training Institute (IRTI) and the World Bank’s Global Islamic Finance Development Center for their joint study leading to a flagship report on “Leveraging Islamic Finance for SMEs”. He stressed that the report promotes the studies that link financing SMEs to the opportunities provided by the Islamic finance.”I also envisage that this report will bring significant benefits to G20 constituencies, as well as other developing  countries, who are interested in leveraging the Islamic financial services industry for stimulating SMEs”, Dr. Ali said.

The IDB Group President then praised the exemplary efforts by the Government of Turkey for establishing the SMEs international forum within the scope of the G20 meeting. He further deliberated on the significance of supporting SMEs and their contribution to job creation and consequently accelerating economic growth. “The major challenge faced by SMEs is access to financing. The need to deal with this challenge better highlights the significance of recognizing the potentials of Islamic finance which can greatly contribute to development of SMEs as it helps in promotion of collective cooperation for the sake of production and investment”.

Concluding his speech, Dr. Ahmad Mohamed Ali called for the establishment of a working group to exchange expertise and develop innovative Islamic financial instruments.