Dar es Salaam, June 12, 2013 — IFC, a member of the World Bank Group, today announced a loan of $70 million to Export Trading Company (ETC) Group’s expansion in Africa, and helping the agricultural supply chain managing company’s  reach to smallholder farmers and spur economic growth. Based in Mauritius, ETC Group has food processing and trading operations in Sub-Saharan Africa, the Middle East and Asia.  
ETC Group will use the financing to set up processing plants for cashew, pigeon pea and soya in Cote d’Ivoire, and Tanzania. The company also plans to build commodity warehouses in Zambia, Tanzania, Nigeria, and other Sub-Saharan Africa countries.

IFC and ETC Group will work together to help the company source more products from local smallholder farmers. ETC expects its purchases from farmers and entrepreneurs to increase from $491 million currently to $2.7 billion by 2017. In turn, the farmers will receive crop finance from ETC Group and gain access to the Group’s regional and global markets. ETC Group’s new processing plants and warehouses will provide better quality and more affordable sources of food as well as create jobs in the countries where they are based.

In many countries with large numbers of poor Muslims, Sharia-compliant microfinance is one among many interventions designed to bring citizens into the financial mainstream.

This is not the case in Sudan. Here, Sharia-compliant microfinance is the government-mandated rule, not the exception. That’s because the country’s banking system went fully Islamic in the 1980s, legislating Sharia principles like risk-sharing, leasing, and interest-free “loans.”

So how has this national experiment fared? And what can Sudan teach us about how to make Sharia-compliant microfinance viable? ...