A newly published report by DinarStandard, an Islamic economy consultancy and investment firm Elipses has estimated the Islamic fintech market size within the Organisation of Islamic Cooperation (OIC) countries to be at $49 billion in 2020.
The report projects the market to achieve a Combined Annual Growth Rate (CAGR) of 21 percent and reach $128 billion in market size by 2025.
While the latest projection is higher compared to the traditional fintech market which is expected to grow at a CAGR rate of 15 percent during the same period, the volume traded by the Islamic fintech market is just 0.7 percent of the former.
Saudi Arabia, UAE, Malaysia, Turkey and Kuwait are the top five OIC markets in terms of transaction volume for Islamic fintech accounting for 75 percent of the OIC Islamic fintech market size.
Developments in the Market
Saudi Aramco-backed Islamic fintech start-up Wahed which operates out of the US acquired British digital banking app Niyah in 2020.
Meanwhile, London Stock Exchange (LSE)-listed independent fintech company Supply@ME Capital unveiled its plans to introduce a Shariah-compliant inventory monetization Fintech solution.
Global Islamic Fintech Index
DinarStandard-Elipses report also revealed the Global Islamic Fintech (GIFT) Index, an indicator of a conducive market ecosystem supporting the growth of the Islamic fintech market.
Malaysia, Saudi Arabia and the UAE lead the Index which ranked 64 OIC and non-OIC countries.
Nine out of the top ten (90 percent) countries on the Index were from OIC and had a Muslim majority population. The UK which is growing as a conducive Islamic Fintech ecosystem is an exception.
The Index measured each country on a total of 32 indicators spread across five different categories. Each country was assessed on Talent, Regulation, Infrastructure, Islamic Fintech Market & Ecosystem and Capital.
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