$10bn Islamic Solidarity Fund for Development approves first programs for sponsorship in Fight for Poverty Reduction

The two programs – known as the Vocational Literacy Program for Poverty Alleviation (VOLIP) and the Microfinance Support Program (MFSP) - will seek to provide together some $1bn in financing over the next five years in order to help address some of the most fundamental causes of poverty in member nations of the IDB, namely lack of education and of employment opportunities.

The ISFD, whose objectives are linked directly to supporting the achievement of the United Nations’ Millennium Development Goals, is focused on poverty alleviation and development in the poorest IDB member states, 80% of which are located in sub-Saharan Africa, as well as to combat pockets of poverty in other member countries.

The VOLIP program will aim to provide some $500m in funds over a five-year period for vocational literacy.

One of the most prevalent characteristics of IDB nations is high incidences of illiteracy, averaging some 32% of the population of the Islamic world.

The objective of the program will be to reduce poverty – particularly among women and rural populations – by equipping them with relevant and functional literacy skills.

Among these groups, specific targets are Out-of-School Children, Teenagers and Young Adults, Women Workers and Adult Groups.

The program is innovative and unique in a number of ways. It is focused on vocational literacy versus academics, helping people to improve their lives in practical ways.

It also seeks to benefit families – children not attending school as well as illiterate parents – creating synergies and an intra family incentive to learn. The program also includes a micro-financing facility to help its graduates initiate their own micro businesses.

Closely tied to the VOLIP program is the MFSP, which will extend $500m in micro-financing to poor communities in member nations over the next five years in order to help create employment opportunities and improve living conditions.

Importantly, families participating in the VOLIP program will be given priority access to microfinance under the MFSP.

The program will also complement other microfinance programs already being undertaken by the Bank. Microfinance projects implemented by the IDB continue to generate growing evidence that they can make a significant contribution to poverty alleviation.

The ISFD will contribute $100m in funds to each initiative over the duration of the programs and will raise the additional funds from other international development financing institutions, NGOs and public and private sector sources in member countries.

Commenting on the announcement, President of the Islamic Development Bank, Dr. Ahmad Mohamed Ali, said: “We are delighted to have received Board approval for the First Five-Year Strategy (2008-2012) of the Islamic Solidarity Fund for Development estimated to cost $13.50bn and for the implementation of the first two programs under this strategy.

The Fund seeks to combat poverty amongst the most vulnerable members of society and we believe that access to education and employment opportunities are critical to enhance their standards of living.

These programs will be launched with the financial resources already raised by the Fund as well as those provided by the IDB itself. At the same time, we continue our mobilisation drive, calling on member states of the Bank and private sector sources to donate generously to the ISFD.”

The ISFD intends to launch the two programs immediately after the OIC Summit to be held in Dakar (13-14 March, 2008).

Plans are also underway to develop and launch other targeted programs in the months ahead as the Fund seeks to meet its broad based objectives, which encompass efforts aimed at building the productive capacity of member states through initiatives that foster sustainable economic growth and job creation, reduce illiteracy, eradicate diseases and epidemics, particularly Malaria, Tuberculosis (TB) and HIV/AIDS, and develop basic infrastructure.