The Road to the SDGs

PURPOSE X The average number of MSMEs per 1,000 people in IsDB MCs is 53.2. This is more than double the world average of 25.2. X Lockdowns that are taking place globally are putting an enormous strain on MSMEs in various sectors, with many having been forced to close their businesses during this period. X IsDB has set up SERVE to help provide MSMEs in IsDB MCs with much-needed liquidity to survive this difficult period. X The Programme is in line with the mandate of poverty alleviation of IsDB’s ISFD and is part of ISFD’s support to IsDB’s COVID-19 response. METHOD X The main goal of the Programme is to design a support package targeting MSMEs in IsDB’s priority MCs, designated according to IsDB’s prioritisation and selection tool. X This aligns with the objectives of IsDB’s SPRP approved in March 2020 and is consistent with the ‘Restore’ track of the SPRP, which covers medium-term action by financing trade and MSMEs to: – Sustain activity in core strategic value chains – Ensure continuity of supplies, mainly to the health and food sectors. X Concessional financing provided by ISFD will reduce the cost of financing for Islamic microfinance institutions. ISFD has also been actively engaging partners such as SPARK and Silatech to collaborate with IsDB on projects that will be approved under the Programme. This will further enhance the leverage ratio of IsDB/ISFD resources that will be pledged under SERVE. X A line of finance will be provided to Islamic microfinance institutions. Concessional resources (IsDB loans and ISFD loans) will be channelled through the government of each country in US dollars. The direct borrower of the sovereign loan will be responsible to repay IsDB, which will on-lend to the selected Islamic microfinance institution(s) in the equivalent local currency so that the currency exchange risk will be borne by the government. X The on-lending agreements will transfer the same terms of financing provided by IsDB/ISFD to the Islamic microfinance institution. A new programme provides immediate and targeted cash-flow support to MSMEs that are adversely impacted by COVID-19, while helping to sustain their business operations beyond the crisis Strengthening the economic resilience of vulnerable enterprises in response to COVID-19 The COVID-19 pandemic is exacerbating already high unemployment rates and poverty in IsDB MCs. The SERVE Programme is providing much- needed support [ 92 ] SDGs