Islamic Finance Market Report 2024

This Islamic Finance market report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The islamic finance market size has grown rapidly in recent years. It will grow from $7.16 billion in 2023 to $7.99 billion in 2024 at a compound annual growth rate (CAGR) of 11.6%. The growth observed in the historic period can be attributed to several factors such as the increasing demand for Sharia-compliant products and practices, the stimulation of fresh interest due to substantial oil wealth, the emphasis on risk-sharing in financing, strong investments in halal sectors, and the expansion of Islamic banking services.

The islamic finance market size is expected to see rapid growth in the next few years. It will grow to $12.45 billion in 2028 at a compound annual growth rate (CAGR) of 11.7%. The growth anticipated for the forecast period can be attributed to several factors such as the expansion of the Islamic finance industry, the increasing Muslim population, a focus on ethical and socially responsible investing, government support and regulation, and the globalization of Islamic finance. Key trends expected during this period include the adoption of electronic modes for all products and services, innovation in financial products, the launch of new Islamic exchange-traded funds (ETFs), growing popularity of ESG-related financial assets, and the integration of financial technology.

The growth of the Muslim population is expected to drive the expansion of the Islamic finance market. This increase in population is largely due to high fertility rates and a relatively young demographic. Muslims turn to Islamic finance to manage their financial needs in accordance with shariah law, which prohibits interest and promotes ethical, risk-sharing financial practices. This ensures that their financial activities align with their religious beliefs and values. For example, in June 2024, the Alliance for a New Middle East Peace (ALLMEP), a U.S.-based non-profit organization, reported that Israel's Muslim population reached 1.782 million by the end of 2023, making up 18.1% of the total population, with an increase of 35,000 people from 2022. As a result, the growing Muslim population is contributing to the growth of the Islamic finance market.

Prominent companies in the Islamic finance sector are focusing on innovation in financial products, such as digital banking platforms, to gain a competitive edge. These platforms enable customers to manage accounts, conduct transactions, and access financial products online or via mobile applications. For instance, in March 2023, Salaam Bank Limited, a Uganda-based commercial financial institution, launched its first interest-free commercial banking system and digital banking platforms, aligning with Islamic principles. This development is expected to contribute significantly to Uganda's financial sector and attract more Muslim investors to the country’s economy.

In May 2024, Al Salam Bank B.S.C., a Bahrain-based financial institution, acquired Kuwait Finance House Bahrain B.S.C. for an undisclosed amount. This acquisition is part of Al Salam Bank's growth strategy to expand its portfolio and strengthen its position as the fastest-growing Islamic bank in Bahrain. Kuwait Finance House Bahrain B.S.C. is also based in Bahrain and provides Islamic finance services.

Major companies operating in the islamic finance market are Maybank Islamic, Abu Dhabi Commercial Bank, Etiqa Islamic Berhad, Al Rajhi Bank, Mellat Bank, Riyad Bank, Abu Dhabi Islamic Bank Egypt, Kuwait Finance House, Saudi British Bank, Al Baraka Bank, Bank ABC Islamic, HSBC Amanah, First Security Islami Bank, Bank of Khartoum, Al-Arafah Islami Bank, Social Islami Bank, Al Salam Bank, Ajman Bank, Al Hilal Bank, Bank Islam Brunei Darussalam, Bank Nizwa, EXIM Bank, Iraqi Islamic Bank of Inv & Dev, Affin Islamic Bank, OCBC Al-Amin Bank, Bank Keshavarzi, Barwa Bank, Khaleeji Commercial Bank.

Middle East And Africa was the largest region in the islamic finance market in 2023. Asia-Pacific is expected to be the fastest-growing region in the market. The regions covered in the islamic finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the islamic finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Islamic finance is a financial system that operates according to Islamic law (Sharia), which forbids interest (riba) and emphasizes ethical investing, profit-and-loss sharing, and asset-backed financing. It encompasses banking, investments, insurance, and other financial services that adhere to these principles, aiming to promote social justice, economic welfare, and equitable wealth distribution.

The primary sectors of Islamic finance include Islamic banking, Islamic insurance (takaful), Islamic bonds (sukuk), other Islamic financial institutions (OIFIs), and Islamic funds. Islamic banking is a system that aligns with Islamic law by prohibiting interest (riba) and advocating profit-sharing. This sector serves various business sizes, from small and medium enterprises to large corporations, and differs from retail banking, commercial banking, and investment banking.

The islamic finance market research report is one of a series of new reports that provides islamic finance market statistics, including islamic finance industry global market size, regional shares, competitors with an islamic finance market share, detailed islamic finance market segments, market trends, and opportunities, and any further data you may need to thrive in the islamic finance industry. This islamic finance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The islamic finance market includes revenues earned by entities by providing services such as sharia-compliant banking services, investment products, leasing (ijarah), trade financing (murabaha), and asset management services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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