Senegal’s Microfinance Minister Alioune Dione recently launched the African country’s new investment vehicle titled Islamic Microfinance Development Fund (FDMI), that will structure and expand financing for the nation’s small businesses and the domestic economy. The fund aims to mobilize CFA200 billion (about USD 357.6 million) over five years to support 300,000 projects, with a focus on rural areas.
According to Abdou Diaw, head of the FDMI, the fund will mobilize Sharia-compliant resources and channel them toward small and medium-sized enterprises (SMEs), as well as organizations in the social and solidarity economy. It has been designed both as a financing tool and as a mechanism to better organize financial flows targeting these segments.
The FDMI replaces the Islamic microfinance development program known as Promise, launched in 2018 with support from the Islamic Development Bank. The program had focused on financing Senegal’s small businesses, women, and young entrepreneurs through products based on Islamic finance principles, including risk and profit sharing. SMEs account for about 97% of Senegal’s economic structure, playing a central role in employment and value creation.
“Promise’s transition into a formal fund brings a stronger governance framework and a broader regional rollout aimed at increasing social and economic impact. The shift reflects a broader effort by the government to structure its approach to Islamic microfinance and expand its role in promoting financial inclusion and entrepreneurship,” reported Ecofin Agency.
Senegal, which has close to 95% Muslim population, Islamic banking assets occupy a small share of the overall financial system. However, the African country is trying hard to change it. In 2015, it adopted a legal framework for waqf, apart from issuing several sovereign sukuk bonds, with a fourth issuance planned in 2026.
In February this year, the Islamic Bank of Senegal (BIS) signed a 20-million-euro financing agreement with the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group.
The agreement will expand BIS’s trade finance capacity, apart from supporting Senegal’s small and medium-sized enterprises. The funding also forms part of the five-year, 2-billion-euro framework signed in May 2025 between Senegal and the ITFC, under which, financing will target imports and exports of essential goods, including petroleum products and peanuts.
The ITFC will also mobilize 413.25 billion CFA francs for key sectors in Senegal, with the goal of supporting the African nation’s supply chains, hydrocarbon supplies, and the peanut sector.