• New fund aims to mobilize CFA200 billion to finance 300,000 projects
• Targets SMEs and rural economy through Sharia-compliant financing
• Move seeks to expand financial inclusion in an underdeveloped segment

Senegal on April 21 launched the Islamic Microfinance Development Fund (FDMI), a new vehicle designed to structure and expand financing for small businesses and local economic actors. The fund, announced by Microfinance Minister Alioune Dione, aims to mobilize CFA200 billion (about $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, as well as organizations in the social and solidarity economy. It is designed both as a financing tool and as a mechanism to better organize financial flows targeting these segments.

From pilot program to structured fund

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 small businesses, women, and young entrepreneurs through products based on Islamic finance principles, including risk and profit sharing.

Its 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.

Growth potential in an underdeveloped market

Islamic finance offers a pathway to expand access to financial services in underserved segments. In Senegal, where about 94% of the population is Muslim, Islamic banking assets remain a small share of the system. According to the International Finance Corporation, they accounted for around 8.3% of total banking assets in 2024.

The launch of the FDMI comes amid broader efforts to develop the sector. Senegal adopted a legal framework for waqf in 2015 and has issued several sovereign sukuk bonds, with a fourth issuance planned this year. These steps are helping to build an ecosystem that supports the expansion of Sharia-compliant financing.

Chamberline Moko