The IF-CAF is a holistic diagnostic assessment tool which will provide an early indication of the strengths and weaknesses of a country’s Islamic finance ecosystem
JEDDAH, Kingdom of Saudi Arabia: The Islamic Development Bank Institute (IsDBI) (www.IsDBInstitute.org) is pleased to announce that it has completed the development phase of its industry-leading initiative, the Islamic Finance Country Assessment Framework (IF-CAF).
The IF-CAF is a holistic diagnostic assessment tool which will provide an early indication of the strengths and weaknesses of a country’s Islamic finance ecosystem, including analysis related to existing laws, regulations, supervision, taxation, governance, financial inclusion, financial-sector digitalisation and other issues.
Additionally, in line with the forward-looking vision and development mandate of the IsDB Group, the IF-CAF adopts a “developmental” assessment approach aiming to facilitate integration of the Islamic finance industry into the mainstream national development agendas of the IsDB Member Countries.
The Acting Director General of IsDB Institute and Group Chief Economist, Dr. Sami Al-Suwailem, said: “The IF-CAF is an important diagnostic tool which will facilitate integration of Islamic finance to support member country governments in achieving many of their key strategic objectives such as boosting financial inclusion, enhancing digitalisation of the financial sector, developing their social finance sector and diversifying the sources of funds for the governments and the business sector, thereby aligning Islamic finance with the Sustainable Development Goals”.
The IF-CAF covers diagnostic assessment on the various sectors of the financial system including Islamic banking, Takaful, Islamic capital markets, Islamic social finance, and non-banking institutions such as leasing companies, development finance institutions, microfinance and non-profit financial institutions, FinTech and digital banks, etc.
The Framework was developed over a period of two years and involved several rounds of rigorous consultation with experts from both within the IsDB Group and external partner institutions including central banks and international organisations.
In the next phase, the IsDB Institute will pilot-launch the IF-CAF and conduct field assessments in a select group of Member Countries. Based on the field experience, the IF-CAF will be refined further to enhance its robustness.
In the longer-term, the IF-CAF will be an on-going diagnostic tool covering all IsDB Member Countries and the assessment reports generated will serve as a critical input/feedback mechanism to the larger IsDB Group development interventions (e.g., through IsDB Member Country Partnership Strategies [MCPS]) in the assessed Member Countries.