The Islamic Development Bank (IsDB)

The Islamic Development Bank is the OIC's multilateral development-financing institution, funding infrastructure, social development and poverty reduction across its member states on Shariah-compliant terms.

At a glance

Established in 1973 and beginning operations in 1975, the IsDB is headquartered in Jeddah and owned by its 57 member states, with Saudi Arabia the largest shareholder. It functions much as a regional development bank — financing roads, power, water, health and education — but does so through instruments that avoid interest (ribā), using profit-sharing, leasing and cost-plus structures drawn from Islamic commercial law.

Over time the bank has grown into a group, with affiliates for private-sector finance, trade finance, insurance (takāful) and the promotion of investment among members. It raises much of its funding through ṣukūk, the Islamic capital-market instruments often described as the counterpart to bonds, and has become one of the most highly-rated issuers in that market.

The IsDB sits at the financial centre of the OIC system, and its work connects the doctrinal principles set out in Chronicle's articles on Islamic economics and finance to the concrete development needs of the Muslim-majority world.

Related in Chronicle

Curated reference on Islamic belief and thought. On matters where traditions differ, positions are attributed rather than adjudicated; verify points of doctrine with qualified scholars.