World’s Islamic finance assets to reach $3.69tn by 2024 : Report

By Rahul Vaimal, Associate Editor
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Islamic Finance
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Global Islamic Finance assets are projected to reach $3.69 trillion by 2024, as per the Islamic Finance Development Report of 2020.

According to the report released by the leading data provider, Refinitiv and the Islamic Corporation for the Development of the Private Sector (ICD) a wing of Islamic Development Bank (IsDB), the global Islamic finance assets has made an increment of 14 percent year-on-year which totals to $2.88 trillion in 2019.

The Islamic finance assets of the Gulf Cooperation Council (GCC) region totaled to $1.2 trillion in 2019 which was followed by the Middle East and North Africa (MENA) region at $755 billion (excluding the GCC) and then Southeast Asia with $685 billion.

The report further shows the top five developed countries in terms of the Islamic finance, which includes Malaysia, Indonesia, Bahrain, UAE and Saudi Arabia.

The Islamic banking sector contributes to the bulk of global Islamic finance assets. The sector grew 14 percent in 2019, corresponding to $1.99 trillion in global assets. This compares with just 1 percent growth in 2018 and average annual growth of 5 percent over the period from 2015 to 2018.

David Craig
David Craig
CEO – Refinitiv

“The Islamic Finance Development Indicator is now such an important tool for policymakers and market participants. This market is worth nearly $3 trillion already and I’m excited about its future, particularly when it comes to sukuk and because Islamic finance has so much in common with sustainable finance – one of the most significant trends in global business today.”

“We believe that the analyses and information provided in this year’s report will serve as a vital reference point for the state of the Islamic finance industry during these difficult times and we remain convinced that Islamic finance can play a major role in alleviating the social and economic consequences of the COVID-19,” the CEO of ICD, Ayman Sejiny stated. 

In 2020, the Green and Socially Responsible Investments (SRI) surged in the UAE and Southeast Asian region. The COVID-19 created significant changes in Islamic banks as some reported reduced profits throughout this year while some areas of the industry posted growth with regulators opting for Islamic finance to mitigate the economic impact.

Corporate sukuk issuance has also came alive after a pause in the first quarter of 2020. The report shows that companies are taking benefit of low borrowing costs to support their finances as trade and economies were trembled by the pandemic hit.

The report considers 135 countries considering five key metrics comprising quantitative development, knowledge, governance, awareness and Corporate and Social Responsibility (CSR).