Bahrain Development Bank

Bahrain Development Bank (BDB) is a government-owned development finance institution established to promote investment and economic diversification in Bahrain. It focuses principally on small and medium-sized enterprises, entrepreneurs, start-ups, and businesses operating in sectors considered important to national development. BDB is registered with Bahrain's Ministry of Industry and Commerce and is licensed by the Central Bank of Bahrain as a conventional retail bank. The bank was created by Legislative Decree No. 19 of 11 December 1991 and began banking operations on 20 January 1992. Its original mandate was to encourage investment in Bahrain, especially in crucial industries that could broaden the country's economic base. The institution was initially capitalized with BD10 million. Government agencies subscribed BD7.25 million, while local commercial banks and private-sector investors provided the balance. The government also committed to lend BDB BD4 million annually at an interest rate of 2% during each of its first ten years, with the intention of strengthening the bank's resources over time. BDB's services have included business finance, Islamic financing, and financing associated with Tamkeen, Bahrain's enterprise and workforce-support ecosystem. Its target sectors have included manufacturing, agribusiness, healthcare, and other service industries. In addition to direct lending, the bank has supported entrepreneurs through advisory services, incubation, investment vehicles, and partnerships designed to improve access to finance and technical expertise. This gives BDB a broader role than a conventional commercial lender: it acts as an institutional mechanism for developing smaller businesses and encouraging private-sector activity. During its early years, BDB concentrated on building its operating platform and approving projects for new and expanding businesses. By the end of 1993, it had approved 49 projects with an expected aggregate project cost of BD27.829 million. Many of the approvals were start-ups, although the bank was still absorbing establishment expenses and had not yet reached profitability. In May 1994, it became the first Gulf financial institution to qualify as a European Community Investment Partner, enabling Bahraini private-sector businesses to access European funding opportunities, contacts, and technical support. The bank has also developed investments and affiliated entities intended to extend its development mandate. These have included the Bahrain Business Incubator Centre, BDB SME Fund Company, Middle East Corner Consultancy, Arabian Taxi Company, and EBDA Bank. Their activities have covered business incubation, SME fund management, consultancy, taxi operations, and microfinance or related advisory services. The entities cited in the reference material are held in Bahrain, with BDB holding varying ownership stakes. BDB has pursued international and private-sector partnerships. In 2014, it signed an agreement with India's Small Industries Development Bank of India to obtain technical assistance in areas including risk management and credit management. The same year, it collaborated with Microsoft on the Imagine Cup competition, supporting entrepreneurs and creators developing solutions to major social and global challenges. These activities reflected an effort to complement lending with capability-building, innovation support, and entrepreneurship promotion. BDB remains a state-owned development institution rather than a publicly traded bank. Its ownership structure and policy mandate expose it to the broader priorities of Bahrain's economic-development strategy. At the same time, its lending profile and reliance on public funding have been identified as credit considerations. In 2015, Moody's assigned the bank a Baa2 issuer rating and Prime-2 short-term rating with a negative outlook, citing the risk profile of its loan portfolio and dependence on public-sector support. The bank's continuing identity is therefore defined by a dual role: it provides regulated banking services while serving as a policy instrument for SME finance, entrepreneurship, and diversification in Bahrain.

Bahrain Development Bank was established by the Government of Bahrain through Legislative Decree No. 19 on 11 December 1991. The institution was created as a development finance organization intended to promote investment in Bahrain, with particular attention to industries viewed as important to the country's economic future. It began operating as a bank on 20 January 1992. The bank's initial paid-in share capital was BD10 million. Government agencies subscribed BD7.25 million, with local commercial banks and private-sector investors contributing the remainder. The government also committed to provide BD4 million annually during each of the first ten years through a loan carrying 2% annual interest. This arrangement was designed to expand BDB's financial resources and support the institution as it established its lending and investment operations. Isa A. Borshaid, then Undersecretary at Bahrain's Ministry of Finance, served as the founding chairman. Roger J. Webster, previously associated with the Gulf Investment Corporation in Kuwait, became the first chief executive officer. In its initial phase, BDB built a portfolio of projects while absorbing the costs of establishing a new financial institution. At the end of 1993, it employed 19 people and had approved 49 projects with an expected combined project cost of BD27.829 million. Twenty-four of the projects were start-ups. Although a substantial number of approvals had reached full disbursement or the final documentation stage, the bank reported a cumulative loss of BD45,274 for that year after accounting for interest on its government loan. BDB expanded its external connections in May 1994 when it became the first Gulf financial institution to qualify as a European Community Investment Partner. The designation gave Bahrain's private sector access to potential European funding, business contacts, and industrial networks. During 1994, Shaikh Ebrahim Bin Khalifa Al Khalifa succeeded Isa Borshaid as chairman, while Khalid S. S. Shaheen succeeded Roger Webster as chief executive officer. Over time, BDB developed from a narrowly defined development lender into a broader SME-support platform. Its services came to include business finance, Islamic financing, and Tamkeen-related finance for businesses in manufacturing, agribusiness, healthcare, and other service sectors. The bank also supported entrepreneurship through incubation, advisory work, and investment in affiliated entities. These included the Bahrain Business Incubator Centre, BDB SME Fund Company, Middle East Corner Consultancy, Arabian Taxi Company, and EBDA Bank, with ownership percentages differing by entity. The bank pursued partnerships intended to improve the quality and reach of its development-finance activities. In 2014, it entered into an agreement with the Small Industries Development Bank of India for technical assistance in risk management and credit management, with a stated emphasis on helping BDB advance its start-up and SME mission. It also worked with Microsoft on the Imagine Cup competition, supporting entrepreneurs and innovators developing responses to major global challenges. BDB's ownership has remained with the Government of Bahrain, making it a government parastatal rather than a publicly traded company. Its role combines regulated retail banking with public-policy objectives such as private-sector development, entrepreneurship, and economic diversification. This structure has supported its development mandate but has also shaped its credit profile. In 2015, Moody's cited the bank's high-risk loan portfolio and dependence on public funding when assigning a Baa2/Prime-2 rating with a negative outlook. BDB's documented history therefore reflects the continuing balance between commercial banking discipline and its function as a national development institution.

• 2015

  Moody's rating and negative outlook

  [1]Bahrain Development Banken.wikipedia.org

  Moody's assigned BDB a Baa2/Prime-2 rating combination with a negative outlook, highlighting portfolio risk and public-funding reliance.

• 2014

  Technical-assistance agreement with SIDBI

  [1]Bahrain Development Banken.wikipedia.org

  BDB agreed to receive technical assistance from India's Small Industries Development Bank in risk and credit management.

• 2014

  Imagine Cup collaboration

  [1]Bahrain Development Banken.wikipedia.org

  BDB collaborated with Microsoft on the Imagine Cup competition to encourage entrepreneurial and technology-oriented solutions.

• 1994

  European Community Investment Partner qualification

  [1]Bahrain Development Banken.wikipedia.org

  BDB became the first Gulf financial institution to qualify as a European Community Investment Partner.

• 1993

  Initial project portfolio developed

  [1]Bahrain Development Banken.wikipedia.org

  By year-end, BDB had approved 49 projects, including 24 start-ups, while continuing to absorb its establishment costs.

• 1992

  Banking operations commence

  [1]Bahrain Development Banken.wikipedia.org

  BDB began operating as a bank on 20 January, implementing its development-finance mandate.

• 1991

  BDB established by legislative decree

  [1]Bahrain Development Banken.wikipedia.org

  The Government of Bahrain established Bahrain Development Bank under Legislative Decree No. 19 to promote investment and important industries.

Government-owned development bank and SME-focused policy lender

• SME lending

  Business finance

  Financing for small and medium-sized businesses, start-ups, and development projects in Bahrain. The bank's historical project portfolio included new ventures and businesses in productive sectors, with lending intended to promote investment and broaden private-sector activity.

• Islamic banking

  Islamic financing

  Sharia-compliant financing offered as part of BDB's support for enterprises and entrepreneurs. The available reference material identifies Islamic financing as one of the bank's principal service categories but does not specify individual products or contract structures.

• Enterprise-support finance

  Tamkeen finance

  Financing associated with Bahrain's Tamkeen enterprise-support framework. It is aimed at helping eligible businesses obtain funding, particularly in sectors such as manufacturing, agribusiness, healthcare, and services.

• Business development services

  Entrepreneurship and incubation support

  Non-lending support delivered through incubation, advisory services, and affiliated entities such as the Bahrain Business Incubator Centre. These activities complement BDB's financing role by helping emerging businesses develop capabilities and become investment-ready.

• 2014Imagine Cup collaboration

  Bahrain

  BDB worked with Microsoft on the Imagine Cup competition, encouraging entrepreneurs and creators to develop solutions addressing major global challenges.

  Outcome. The reference material does not report a specific winner, financial result, or quantitative outcome.

  Source

• 2014

  Technical partnership with SIDBIStrategy

  Background

  BDB aimed to strengthen its ability to support start-ups and manage development-oriented credit risk.

  Action taken

  BDB signed an agreement under which India's Small Industries Development Bank would provide technical assistance in risk management and credit management.

  Aftermath

  The partnership was intended to improve BDB's institutional capabilities, although the reference material provides no measured results.

  Source

• 1994

  European Community Investment Partner qualificationStrategy

  Background

  BDB sought to connect Bahraini private-sector businesses with external finance, expertise, and industrial networks.

  Action taken

  The bank qualified as a European Community Investment Partner.

  Aftermath

  Bahraini businesses gained potential access to European funding channels and business contacts.

  Source

• 1991

  Creation as a national development bankStrategy

  Background

  Bahrain sought an institution capable of promoting domestic investment and supporting industries important to economic development.

  Action taken

  The government established BDB by legislative decree and provided initial capital and a long-term funding commitment.

  Aftermath

  BDB began operations in January 1992 and became a dedicated development-finance platform for Bahrain.

  Source

• 2021.06.26

  Reported2021.06.26

  Bahrain Development Bank launches tijara platform for SMEs[2]巴林发展银行推出面向中小企业的tijara平台newsofbahrain.com

  Bahrain Development Bank announced the launch of tijara, a digital banking platform that lets small and medium-sized businesses apply for loans online. The platform was initially available to selected bank customers.

Read more

1. 1Bahrain Development Banken.wikipedia.org
2. 2巴林发展银行推出面向中小企业的tijara平台newsofbahrain.com