Jakarta, 14 June 2021 - The United Nations Development Program (UNDP) today entered a partnership with Universitas Islam Internasional Indonesia (UIII) to set up the country’s first Center of Excellence on Islamic Finance for the achievement of the Sustainable Development Goals (SDG) together with the Islamic Development Bank (IsDB).
This partnership—established through the signing of a Memorandum of Understanding (MoU)—is part of UNDP's innovation strategy to harness and expand creative sources of financing for SDGs acceleration in Indonesia. Indonesia, like other parts of the world, is faced with SDGs funding gaps in billions of dollars every year.
The Center of Excellence, located in UIII in Depok, West Java, will conduct advanced research on scaling up initiatives, and exploring new opportunities for the practical application of Islamic finance for the SDGs in various fields.
“I’m excited to support this pioneering center of excellence, because it can unlock many more opportunities on SDGs financing, benefiting communities across Indonesia. The setting up of this center of excellence mark a milestone in nurturing innovative learning to marry the principles of Islamic finance with sustainable development,” said UNDP Indonesia, Norimasa Shimomura.
Under the MoU, the Center of Excellence will conduct activities such as; 1) Developing joint initiatives to channel Islamic finance instruments towards achievening the SDGs; 2) Contributing Islamic finance insights on programs and outreach mechanisms; 3) Providing support on communications strategies for Islamic finance on SDGs and financial inclusion; 4) Training, workshops and conferences to boost the awareness of Islamic finance and SDGs.
“Current literature suggests that from Quranic perspective, SDG’s values have been initiated even fourteen centuries ago before Elkington in 1997 introduced the concept of triple bottom line (profit, people, planet) which later on is used as primary reference for sustainable model in business. Now, it is time for us to apply these values in our Islamic financial industry to improve its green financing, reaching its services to rural areas and expanding its product to accommodate disadvantaged group in the society,” said Komaruddin Hidayat, Rector of UIII.
Indonesia is already setting excellent examples in leveraging Islamic finance for SDGs. In 2018, Indonesia issued the world’s first green Sukuk, raising more than $3 billion. UNDP has worked with the Government of Indonesia to tap into the potential of key Islamic finance instrument such as zakat, waqf, sukuk, using microfinance, insurance, or fintech mechanisms.
Islamic Finance assets stood at US$2.88 trillion in 2020 and are expected to grow to US$3.69 trillion by 2024, according to the latest report by the Islamic Corporation for the Development of the Private Sector (ICD) and fintech company Refinitiv Global.
This partnership is based on a portfolio of Islamic finance (research and development exercises, training and workshops, and events and exposures) that have been successfully carried out by UNDP Indonesia’s Innovative Financing Lab and its various partners since 2017.
UNDP Indonesia Communication Specialist, Tomi Soetjipto, email@example.com
UNDP Indonesia Islamic Finance Specialist, Greget Kalla Buana firstname.lastname@example.org
UNDP is the leading United Nations organization fighting to end the injustice of poverty, inequality, and climate change. Working with our broad network of experts and partners in 170 countries, we help nations to build integrated, lasting solutions for people and planet.
Universitas Islam Internasional Indonesia (UIII) is a newly established graduate institution founded under the mandate of Presidential Regulation Number 57 of 2016 on the Establishment of UIII as a higher education institution with international standards, to be a leading Islamic higher education model in Islamic studies, social sciences, humanities, and technological sciences. The university also has various research centers with specific expertise to respond to strategic issues and challenges. The university holds PTN BH status (Legal Entity State University) along with other 12 reputable ones.