Finance for Poverty Reduction

Description

Islamic Development Bank (IDB/IsDB) board of Governors decided to establish the Islamic Solidarity Fund for Development (ISFD) as a Waqf fund worth 10 billion USD with the IsDB objectives of

• reducing poverty,
• building productive capacities for member of states,
• reduce illiteracy, and
• eradicate diseases and epidemics, particularly Malaria, Tuberculosis (TB) and AIDS. Resources will be mobilized from the Bank and from its member countries.

Top-most priority is given to employment and income-generation activities targeting particularly women. Other priority areas include: human development, infrastructure, agriculture, and rural development, emergency relief and post conflict reconstruction and institutional capacity building.

To further enhance its operations, the Fund’s Management has decided to embark on an initiative to formulate an Investment Management Policy to ensure that the Fund’s assets are well managed for profit maximization. Currently, the fund is performing poorly generating low returns of less than 1% in the past year.

The main objectives of the review:

• Review and enhance the draft of the Investment Management Policy, which has been prepared to guide the ISFD Management for appropriate assets management and allocation
• Review of the investment best practices and governance’s issues.
• Design of a monitoring framework based on key performance indicators to help in the Fund evaluation. 
• Setting up a control system of performance standards and insures prompt reaction for effective management decision.

Services

Investment Management Policy Review

• Investment objectives
• Asset allocation policy
• Investment Strategy
• Terms of reference guidelines for external fund management
• Spending policy
• Standards of performance
• Governance and Management
• Communication and reporting
• Guidelines for investment consultant
• Mudarib fee and dividend guidelines
• Changes to investment management policy
• Conflict of interest

Best Practices Review

• Review different models of similar funds such as the European Solidarity Fund, the World Solidarity Fund and the Tunisian National Solidarity Fund. 
• Analyze the best practices in fund management and insure well managed fund’s asset for profit maximization.
• Review the literature and best practice of managing endowment funds

Data Collection & Analysis

• Secondary data collection & analysis
• Primary data collection & analysis: Interview with stakeholders (board members, project staff)
• Undertake a gap analysis

M&E Framework

• Recommend a revised policy with a Analysis and monitoring Framework
• Define performance indicators
• define means and tools to measure indicators

Reporting, Learning & Validation

• Recommend revised policy
• Make a presentation to the various stakeholders to validate the proposed policy
• Write up final report