The Islamic Corporation for the Development of the Private Sector (ICD) (www.ICD-PS.org), the private sector arm of the Islamic Development Bank (IsDB), and the Azerbaijan Business Development Fund (ABDF) signed an agreement to launch a Shariah-compliant SME financing program during the IsDB Group Annual Meeting’s Private Sector Forum in Baku. As per the program, the parties agreed to consider deploying up to AZN 200 million to the private sector in Azerbaijan within two years (2026–2028).
The program introduces a local currency (AZN) financing channel, with ICD acting as ABDF’s agent to blend ABDF’s manat funds with ICD’s USD, EUR, and AZN resources. These funds will be used to finance local partner financial institutions via Murabaha, removing foreign exchange risk that has long hindered Azerbaijani SMEs, especially outside major cities. The initiative marks ICD’s first AZN-currency financing in the country.
The program prioritizes rural and liberated areas, women- and youth-led businesses, and green economy projects, aiming to boost employment and build a more inclusive economy.
Dr. Khalid Khalafalla, Acting CEO of ICD, commented: “This program delivers accessible Shariah-compliant financing to the businesses that need it most, with a structure tailored to the realities of Azerbaijan’s economy. By introducing local currency financing for the first time, we are addressing a structural gap in development finance. We are proud to partner with ABDF to create lasting impact for Azerbaijani SMEs.”
Mr. Ulvi Mansurov, CEO of ABDF, commented: “This strategic partnership with ICD represents an important step in expanding Azerbaijani entrepreneurs’ access to international financing. Through this mechanism, we aim to combine ABDF’s resources with ICD’s expertise in Islamic finance to create sustainable and accessible financing opportunities for SMEs across the country. We believe this cooperation will strengthen the participation of local financial institutions in international financing operations, support the development of the real sector, and contribute to more inclusive economic growth in Azerbaijan.”
This agreement marks ICD’s first formal partnership with ABDF and serves as the foundation for long-term collaboration. The program advances ICD’s mandate to mobilize Islamic finance for private sector growth and inclusive prosperity across its 56 member countries. Through this multi-currency facility, ICD works with national partners to deliver targeted impact and build the institutional framework for sustainable SME growth.
