Middle East Islamic Finance Market Size
| Study Period | 2020 - 2029 |
| Market Size (2024) | USD 2 Trillion |
| Market Size (2029) | USD 2.57 Trillion |
| CAGR (2024 - 2029) | 5.12 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | Middle East and Africa |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Middle East Islamic Finance Market Analysis
The Middle East Islamic Finance Market size is estimated at USD 2 trillion in 2024, and is expected to reach USD 2.57 trillion by 2029, growing at a CAGR of 5.12% during the forecast period (2024-2029).
- The importance of the wider Middle East region continues to be clear, accounting for 77.4% of total Sharia-compliant assets in the latest ranking. Iran and Saudi Arabia remain by far the largest markets when it comes to Sharia-compliant assets, with both markets having more than $400bn in assets.
- Six of the 10 largest Islamic lenders come from those two countries, with only one, Malaysia’s Malayan Banking Berhad (Maybank), coming from outside the Middle East. Islamic finance is deeply rooted in the Middle East, a region that continues to shape the modern Islamic finance industry globally. Commanding the lion's share of global Islamic banking and finance assets and wielding enormous influence in the industry, the Middle East has always been an integral part of Islamic finance.
- The post-COVID scenario of the Middle East Islamic finance market has seen a steady recovery with increased demand for Sharia-compliant financial products and services. Islamic banks have adapted to the new normal by leveraging digital platforms and expanding their offerings. Overall, the market is showing resilience and growth opportunities.
Middle East Islamic Finance Market Trends
Growing Fintech Digital Sukuk
- The Gulf has seen a boom in funding for fintech startups. Fintech companies and digital sukuk could be two key growth drivers of the global Islamic finance industry in the Middle East and North Africa.
- Traditional Sharia-compliant bonds, called sukuk, have been popular since the early 2000s. Sukuk was developed as an alternative to conventional bonds that are not considered permissible by many Muslims, as the deals involve paying interest (riba).
- The Sukuk market was worth USD 193.2 billion in 2022, with the main issuers being Malaysia, Indonesia, and Saudi Arabia.
Iran is Leading the Islamic Banking
- Iran's role in leading Islamic banking has had a significant impact on the Middle East Islamic finance market. Iran has a well-established Islamic banking system with a long history of implementing Sharia-compliant financial practices. The country's commitment to Islamic principles, combined with its large population and oil-based economy, has positioned it as a key player in the Islamic finance industry.
- Iran's involvement in Islamic banking has contributed to the growth of the Middle East Islamic finance market by increasing competition. As Iranian financial institutions are expanding their operations and offering innovative Islamic financial products, it is leading to increased competition among regional players. This competition is encouraging financial institutions to improve their offerings and services, ultimately benefiting consumers and driving market growth.
Middle East Islamic Finance Industry Overview
The report covers major international players operating in the Middle East Islamic Finance Market. In terms of market share, some of the major players currently dominate the market. However, with technological advancement and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets. Barwa Bank, Iraqi Islamic Bank of Inv & Dev, Mellat Bank, Post Bank of Iran, and Bank Keshavarzi are a few of the major market players.
Middle East Islamic Finance Market Leaders
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Barwa Bank
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Iraqi Islamic Bank of Inv & Dev
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Mellat Bank
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Post Bank of Iran
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Bank Keshavarzi
*Disclaimer: Major Players sorted in no particular order
Middle East Islamic Finance Market News
- September 2023: Abu Dhabi Securities Exchange (ADX) collaborated with Sharjah Islamic Bank (SIB) to enhance and streamline access to Initial Public Offering (IPO) subscriptions for investors.
- March 2023: Aafaq Islamic Finance, a prominent provider of Shariah-compliant financial products and services, partnered with Rasmala, a distinguished regional investment management firm. This partnership aims to develop and broaden product offerings for Aafaq's clients, as well as to provide advisory services to Aafaq on its proprietary investment book.
Middle East Islamic Finance Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
- 4.1 Market Overview
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4.2 Market Drivers
- 4.2.1 Growing Muslim Population is Driving the Market
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4.3 Market Restraints
- 4.3.1 Lack of Standardization and Harmonization across different Jurisdictions
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4.4 Market Opportunities
- 4.4.1 Digital Transformation and Embracing Fintech Innovations
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4.5 Porter's Five Forces Analysis
- 4.5.1 Threat of New Entrants
- 4.5.2 Bargaining Power of Buyers/Consumers
- 4.5.3 Bargaining Power of Suppliers
- 4.5.4 Threat of Substitute Products
- 4.5.5 Intensity of Competitive Rivalry
- 4.6 Insights on Technological Advancements in the Market
- 4.7 Impact of COVID-19 on Industry
5. MARKET SEGMENTATION
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5.1 By Financial Sector
- 5.1.1 Islamic Banking
- 5.1.2 Islamic Insurance 'Takaful'
- 5.1.3 Islamic Bonds 'Sukuk'
- 5.1.4 Other Financial Institutions (OIFL's) and Islamic Funds
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5.2 By Geography
- 5.2.1 Saudi Arabia
- 5.2.2 Qatar
- 5.2.3 Iraq
- 5.2.4 Iran
- 5.2.5 United Arab Emirates
- 5.2.6 Rest of Middle East
6. COMPETITIVE LANDSCAPE
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6.1 Company Profiles
- 6.1.1 Barwa Bank
- 6.1.2 Iraqi Islamic Bank of Inv & Dev
- 6.1.3 Mellat Bank
- 6.1.4 Post Bank of Iran
- 6.1.5 Bank Keshavarzi
- 6.1.6 Abu Dhabi Commercial Bank
- 6.1.7 Saudi British Bank
- 6.1.8 Riyad Bank*
- *List Not Exhaustive
7. MARKET FUTURE TRENDS
8. DISCLAIMER
** Subject To AvailablityMiddle East Islamic Finance Industry Segmentation
Islamic banking, Islamic finance, or Sharia-compliant finance is banking or financing activity that complies with Sharia and its practical application through the development of Islamic economics. Some of the modes of Islamic banking/finance include Mudarabah, Wadiah, Musharaka, Murabahah, and Ijara.
The Middle East Islamic Finance market can be segmented by the financial sector, which includes Islamic banking, Islamic insurance ‘takaful,’ Islamic bonds ‘sukuk,’ other Islamic financial institutions (OIFLs), and Islamic funds and by geography, which includes Saudi Arabia, Qatar, Iraq, Iran, United Arab Emirates and the Rest of Middle East.
The report offers market size and forecasts for the market in value (USD) for all the above segments.
| By Financial Sector | Islamic Banking |
| Islamic Insurance 'Takaful' | |
| Islamic Bonds 'Sukuk' | |
| Other Financial Institutions (OIFL's) and Islamic Funds | |
| By Geography | Saudi Arabia |
| Qatar | |
| Iraq | |
| Iran | |
| United Arab Emirates | |
| Rest of Middle East |
Middle East Islamic Finance Market Research FAQs
How big is the Middle East Islamic Finance Market?
The Middle East Islamic Finance Market size is expected to reach USD 2 trillion in 2024 and grow at a CAGR of 5.12% to reach USD 2.57 trillion by 2029.
What is the current Middle East Islamic Finance Market size?
In 2024, the Middle East Islamic Finance Market size is expected to reach USD 2 trillion.
Who are the key players in Middle East Islamic Finance Market?
Barwa Bank, Iraqi Islamic Bank of Inv & Dev, Mellat Bank, Post Bank of Iran and Bank Keshavarzi are the major companies operating in the Middle East Islamic Finance Market.
Which is the fastest growing region in Middle East Islamic Finance Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Middle East Islamic Finance Market?
In 2024, the Middle East and Africa accounts for the largest market share in Middle East Islamic Finance Market.
What years does this Middle East Islamic Finance Market cover, and what was the market size in 2023?
In 2023, the Middle East Islamic Finance Market size was estimated at USD 1.90 trillion. The report covers the Middle East Islamic Finance Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Middle East Islamic Finance Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Middle East Islamic Finance Industry Report
Statistics for the 2024 Middle East Islamic Finance market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Middle East Islamic Finance analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
