ISLAMIC DEVELOPMENT BANK LOANS FALL
The Jeddah-based Islamic Development
Bank (IDB) said in an annual report its loans during the last
Islamic year fell 24 pct due to world economic recession.
    Total financing approved by the bank for projects, trade,
and technical and special assistance fell to 756.9 mln Islamic
dinars in the year ended September 4, 1986, from 1,001.4 mln
the previous year.
    "Due to a general recession in the world economy, the demand
for development funds was low and there was a scarcity of
processable projects in most member countries during 1406
(September 1985-86)," the report said.
    It said a steep decline in oil prices had led to a major
transfer of resources from oil-producing countries to
industrial nations.
    "The oil exporting member nations of the IDB faced a major
adjustment problem arising from a sizable decline in oil prices
and loss of export earnings, affecting their position as
potential suppliers of capital," the report said.
    Project financing and technical assistance loans fell to
175.7 mln Islamic dinars in the year ended last September from
269.4 mln the previous year.
    The report said although there was a reduction in foreign
trade financing loans in the past year due to a sharp decline
in the price of oil and various primary commodities, the
quantity financed in physical terms of imports was higher.
    Foreign Trade financing declined to 572.8 mln dinars from
668.2 million dinars the previous year. Disbursements of loans,
including previously-approved loans, fell to 557.2 mln dinars
from 783.9 mln.
    The Bank in 1986 decided to establish a fund under the name
"IDB Unit Trust" to introduce and market financial instruments in
line with the principles of Islam, the report said.
    "This experience will provide a foundation for the floating
of other financial instruments in the near future through which
the bank expects to mobilise even larger resources," the report
said.
    The IDB was established by the 46-member Islamic Conference
Organisation and opened in October 1975.
 REUTER
