Islamic Finance 

Islamic Finance Market Sizing

| 16 February, 2018 | General
Islamic Finance Market Sizing

This article is an extract from the State of the Global Islamic Economy Report 2017/18.

The report can be downloaded from HERE.

This report estimates that the existing Islamic Finance market stood at an estimated $2.2 trillion in assets in 2016, based on data disclosed by all Islamic Finance institutions (full Sharia-compliant as well as those with Sharia ‘windows’) covering Islamic commercial banking, Islamic funds, sukuk, Takaful, and other segments.

Of this $2.2 trillion, Islamic commercial banks were responsible for $1.6 trillion, the Takaful (insurance) sector for $0.04 billion, sukuk (bonds) outstanding for $0.34 billion, Islamic funds for $0.09 billion, and other financial institutions for $0.12 billion. Islamic funds led year-on-year growth at a substantial 34 percent, followed by 7 percent in both banking and Takaful. Other financial institutions showed growth of 3.3 percent, while sukuk shows minimal growth of 1 percent. Total Islamic Finance assets are expected to reach $3.8 trillion by 2022, a CAGR of 9.4 percent, with Islamic commercial banking responsible for most of this growth, and projected to reach $2.4 trillion in assets.

Other industry ecosystem indicators showed, in line with the overall growth of the sector, a 5.8 percent increase in the number of Islamic Finance institutions, a 4 percent increase in the number of outstanding sukuk, and a 0.7 percent increase in the number of Sharia scholars.

Non-OIC countries are increasingly recognizing the potential of Islamic Finance:

- Yielders is the first Islamic FinTech firm to get U.K. regulatory approval

- The Reserve Bank of India included Islamic Finance to improve financial inclusion in India

More OIC countries are waking up to the potential of Islamic Finance, with Iran and Pakistan major potential players

- Faysal Bank Pakistan converted into a fully-fledged Islamic bank

- Tunisia prepared for debut sukuk issuance

- Nigeria aims to issue its maiden sovereign sukuk

Trade finance, crowdfunding and gold represent fastgrowing segments within Islamic Finance, and with crowdfunding an important medium

- World’s first Islamic trade finance bank to be established in Dubai

- Fintech HelloGold is the world’s first Sharia compliant gold platform.

- Sharia crowdfunding platform Ethiscrowd has reached $30 million in project value

-- Wahed Invest, the world’s first Sharia-compliant robo-advisory firm, raised $5 million in seed funding

The sukuk industry continues to mature, with sizeable, multi-billion dollar issuances:

- Saudi Arabia issues the first global sukuk worth $9 billion rated A+/stable outlook by Fitch

- Qatar-based Ezdan Sukuk Company Ltd. plans to establish a $2 billion sukuk program

- Saudi Aramco plans a $2 billion inaugural bond ahead of a major IPO

- $1 billion sukuk listed in Nasdaq Dubai by the Government of Hong Kong

The Awqaf industry is playing an ever-important role in addressing global development needs, with several important initiatives launched:

- Indonesia’s Financial Services Authority (FSA) is supporting the establishment of Indonesian Waqf Venture Bank by June 2017. The bank will support micro, small and medium enterprises

- Telegane state in India has approved the leasing of waqf properties in the state for 30 years

SGIE 2017-2018_Islamic finance market sizing

Read the full State of the Global Islamic Economy 2017/18 or visit GIEI Online Model 

State of the Global Islamic Economy 2017 Report_cover image

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Read the full State of the Global Islamic Economy 2017/18 or visit GIEI Online Model.