Mitragyna Speciosa

World SME Forum can facilitate SME access to Islamic finance

B20’s thematic consultation on Islamic Finance has ben organized in Maputo, Mozambique on June 9, 2015. The event was held under the 40th annual meetings of the Islamic Development Bank Group under name “Promoting Inclusive Business for Growth through Islamic Finance” and

was jointly hosted by the Islamic Development Bank Group and the World Bank.

In the event that brought together leaders
from private sector. multilateral development banks and governments in the Islamic Finance space, B20 Steering Committee Chairman Mr Tunc Uyanik delivered a keynote speech. Mr. Uyanik emphasised the potential role of Islamic finance in addressing the financing gap for small- and medium-sized enterprises, and explained the work of B20 taskforces regarding Islamic finance.

At the event, B20 Turkey, Islamic Development Bank Group and the World Bank issued a joint communique expressing support for the World SME Forum, initiated by the G/B20 Turkey. The communique also emphasized the potential contribution of Islamic finance in fulfilling the mission of the World SME Forum.

Joint communiqué by
the B20 Turkey, Islamic Development Bank Group and the World Bank Maputo,
Mozambique, June 9, 2015

Inclusiveness is one of the three main pillars of Turkish G/B20 presidency. The parties welcome the G20 Inclusive Business framework, being developed by the Turkish G20/B20 Presidency, , to define the inclusive business concept. SMEs are de facto a critical component of the inclusive business agenda.

In this framework, the B20 Turkey puts a special focus on SME issues and acknowledges the SME finance gap as one of the key barriers for SME development. Finding sustainable alternative financing such as asset- and equity-based finance focusing on risk-sharing would be a critical component of strategy to promote inclusive business and SME development.

The parties support establishment of World SME Forum (WSF), initiated by G20 and B20 Turkey as a global platform to design and facilitate implementation of sustainable solutions to SME issues, as recognized by the G20 Finance Ministers in their April 2015 communiqué as well. WSF will provide global support to SMEs through advocacy, advisory services, and digital platforms to enable SMEs to better fulfill their potential as an engine of sustainable growth and job creation.

In this respect, the parties recognize that Islamic finance through its risk-sharing nature could complement efforts to address current funding gap due to global trend to de-risk the banking sector and constrained sustainable market-based solutions. Islamic finance could contribute to the mission of WSF, which is uniquely positioned to develop SME sector and champion its cause at global fora through its platform and extensive network and support of stakeholders.