UNIDO, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the Union of Arab Banks (UAB), and the Africa Finance Corporation (AFC) have launched a strategic partnership under the Islamic and Arab Finance for Economic Transformation in Africa, the Arab Region and Beyond (IFETAA) Programme.
Access to finance remains a critical barrier to small and medium-sized enterprise (SME) growth, particularly across Africa, the Middle East, and South Asia. Only one in five African firms has access to credit, and those that do often face interest rates averaging 25 percent—far higher than the 5 percent common in Europe. Islamic finance, with over US$4 trillion in global assets, presents a largely untapped opportunity to channel this capital into the real economy.
IFETAA aims to mobilize both capital and expertise to support micro, small, and medium-sized enterprises (MSMEs), fostering resilience, productivity, and sustainable growth across low- and lower-middle-income countries. The signing of three partnership agreements took place ahead of a high-level roundtable at Vienna’s Hofburg Palace, on the sidelines of the OPEC Fund Development Forum, marking the formal launch of the programme.
“As traditional development funding continues to decline, Islamic and Arab financial institutions are emerging as key partners in driving industrialization and sustainable development,” said UNIDO Director General Gerd Müller. “Through this programme, we are building a powerful new alliance to support SMEs, enhance productivity, and accelerate economic transformation in developing countries.”
H.E. Shaikh Ebrahim Bin Khalifa Al Khalifa, Chairman of AAOIFI and the International Center for Entrepreneurship and Innovation, emphasized that AAOIFI aims to dedicate at least 20 percent of Islamic financial institution financing—over US$1 trillion—to MSME development. “We will develop Shariah-compliant finance programmes enriched with technical assistance, regulatory support, and capacity building, leveraging UNIDO’s globally recognized Enterprise Development and Investment Promotion (EDIP) model,” he said.
Banji Fehintola, Board Member and Head of Financial Services at AFC, highlighted the programme’s potential for Africa: “IFETAA will unlock urgently needed capital for economic transformation. As an issuer, guarantor, and investor, we are committed to delivering innovative, Shariah-compliant solutions that drive inclusive and resilient growth while strengthening south-south cooperation to advance our shared development goals.”
By integrating Islamic finance with entrepreneurship support and business counseling, IFETAA will help MSMEs become bankable, resilient, and central to inclusive economic growth. Wissam Fattouh, Secretary General of the Union of Arab Banks, described IFETAA as “more than a programme—it is a call to action. We are mobilizing capital not just to fund growth, but to shape the future of our region, empower MSMEs, restore trust in financial systems, and build resilient, inclusive economies.”
