Islamic banking and finance industry is set for a major growth in 2015, growing by nearly 19 per cent to $2.5 trillion (Dh9.175trn) compared to $2.1trn (Dh7.707trn) in 2014, according to a forecast released on Wednesday by AlHuda Centre of Islamic Banking and Economics (CIBE).
Muhammad Zubair Mughal, CEO of CIBE, said Islamic banking share will make up 86%, followed by sukuk at 6%, Islamic fund 4%, Takaful 2% and Islamic microfinance 1%.
“2014 proved to be tremendous for Islamic banking and finance industry. It not only exceeded the limit of $2 trillion assets but it also got access to the new markets including various new destinations of European region, Korea, Australia, Brazil, Malta, Argentine, China and many more.
“Islamic banking and finance gained the popularity in its traditional markets of e.g. Malaysia, Pakistan and Middle East as well. There are various countries which recently stepped into Islamic banking and finance showed very good progress i.e. Morocco, Tunis, Azerbaijan, Kazakhstan, Libya, Oman and non-Muslim countries including Nigeria, Tanzania and South Africa,” Mughal added.
The CIBE study found that there are more than 1,500 organizations working for Islamic banking, finance, takaful, sukuk, Islamic fund, and Islamic microfinance in more than 90 countries all over the world in which Non-Muslim countries share is 40 per cent.
On the other hand, the share of Muslim countries including Qatar, Saudi Arabia, UAE, Malaysia, Pakistan, Indonesia in global Islamic banking market is 76%.
Making a thorough analysis, he added that the downfall of Sukuk market in 2013 got tactfully recovered in 2014. Meanwhile, there is a great chance of rapid growth of sukuk market in 2015, anticipated to reach $150 brillion. Islamic fund industry has also a great potential of gaining its market share to $100 billion.
Talking about Takaful (Islamic insurance), Mughal said the chances are bright with expected growth rate of 15%.
Global Takaful is expected to reach to $20 billion during 2015 with Tanzania, Namibia, Morocco and India emerging as the new destinations for Islamic insurance.
“2015 is taken as a beam of hope for the poor as it will be a good year for Islamic microfinance industrial growth as Islamic microfinance has gained popularity in world poverty alleviation. Many multilateral agencies are helping in the promotion of Islamic microfinance with the help of governmental support in various countries i.e. Pakistan, Yemen, Afghanistan, Sudan, Malaysia etc.,” he added.
He said there are numerous good news related to Islamic banking and finance market affiliated with 2015 including the start of Islamic banking and finance in India is prominent of all where 180 million Muslim population is waiting for the Shariah compliant banking for many years, prominent advancement related to Islamic banking in America is predicted especially in Sukuk market and in Islamic capital market where there is hope to get some diversification of china's hold in capital and investment market.
Dubai being a global Islamic finance hub will continue its position and Kuala Lumpur will still be out of this race which can be really extracted from the recent speech of Malaysian Prime Minister Najeeb Razaq in 10th World Islamic Economic Forum organized in 28th October, Dubai where he recognized Dubai as a global hub of Islamic finance and Economics.