IsDB Group Report on COVID-19 and Islamic Finance

February 2, 2021

The Covid-19 pandemic and associated lockdown have adversely affected the global economic activities. Given the global impact of the crisis, H.E. Dr. Bandar Hajjar, Chairman of the Islamic Development Bank (IsDB) Group, constituted a Working Group to study the impact of the pandemic on the Islamic finance industry. The Working Group, formed on 21 Sha’ban 1441H (14 April 2020), worked tirelessly to produce a document as informative and as relevant as possible. Given the high uncertainty surrounding the Covid-19 crisis, the current document is presented as a Discussion Draft of the desired report.

The Report consists of two sections:

The First Section addresses the Covid-19 pandemic from an Islamic-finance perspective. The Section explores how the principles of Islamic finance enable the economy to withstand exogenous as well as endogenous sources of risk and fluctuations. The Section also analyzes the performance of the Islamic finance industry during the crisis, within the available data.

The Second Section provides a detailed description of the response of the IsDB Group to the crisis caused by the pandemic. The “3R” initiative is a comprehensive plan to support OIC Member Countries through innovative channels created by the IsDB Group. This initiative shows the ability of the IsDB Group to lead Islamic finance by planned and coordinated activities across the 57 Member Countries. This is not a trivial task, but the staff of the IsDB Group are determined to be up to the challenge.