Al Baraka Islamic Bank has signed a significant policy agreement with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) to enhance Shariah-compliant trade financing and reduce risk exposure for Bahraini exporters and investors. The agreement was formalized in Bahrain and represents a major step forward in Islamic trade finance.

ICIEC’s Role and Capabilities

ICIEC operates as a multilateral insurer affiliated with the Islamic Development Bank Group, maintaining an Aa3 rating from Moody’s. The corporation specializes in providing guarantees for trade and investment activities within Organisation of Islamic Cooperation (OIC) member states.

Through this partnership, Al Baraka gains access to ICIEC’s comprehensive insurance instruments, including: (1) credit risk protection, (2) political risk coverage, (3) trade disruption safeguards, (4) default protection mechanisms.

Benefits for Al Baraka and Clients

1. Enhanced Service Capabilities

The agreement enables Al Baraka to extend credit support to businesses with greater confidence while maintaining strict adherence to Islamic finance principles. According to CEO Hamad Abdulla Al Oqab, the partnership underscores our commitment to sustainable Islamic banking and enhances our ability to offer secure, Shariah-compliant trade finance to our customers.

2. Risk Mitigation for Local Businesses

The collaboration provides Bahraini enterprises with improved access to ICIEC’s insurance policies, significantly reducing risk exposure for companies engaged in international trade. This is particularly valuable for businesses operating in OIC markets where ICIEC offers specialized coverage.

Economic Impact and Strategic Objectives

The partnership aligns with Bahrain’s broader economic diversification strategy by making the country more attractive as a hub for Islamic trade and finance. This positioning strengthens Bahrain’s role as a regional financial center.

Bahraini companies trading internationally, particularly in OIC markets, will benefit from enhanced competitiveness through reduced risk exposure and improved access to trade finance solutions.

Vision for Islamic Financial Ecosystem

Al Baraka’s leadership emphasized how such policies enable Bahrain to serve as a safe and credible Islamic banking center. The partnership represents part of the bank’s broader strategy to empower local businesses for global expansion while maintaining faith-based financial values.

Both ICIEC and Al Baraka officials expressed optimism about the partnership’s potential to advance the Islamic financial services ecosystem, particularly in trade finance. The collaboration marks a significant integration of multilateral risk insurance into Islamic banking operations in Bahrain.

Original Article:

News of Bahrain. (2025, July 27). Bahrain ranks third in Global Islamic Finance Development Indicator. https://www.newsofbahrain.com/business/116072.html