Market Trends of Middle East Islamic Finance Industry
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.
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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.
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