Islamic finance: High growth potential but serious challenges persist

Islamic finance: High growth potential but serious challenges persist


The Islamic finance industry has witnessed strong double digit growth in recent years, and yet serious problems persist that are likely to stop it from growing beyond a certain point. These include a lack of access to financial institutions in Muslim majority nations, general instability in large parts of the Muslim world, as well as a lack of concensus amongst the Islamic clergy from their various respective schools of thought, as to what exactly is Islamic finance.

Whilst sharia compliant financial services have existed ever since the beginning of Islam in some shape or form, it is only in the 1970s that they were increasingly centralized and adapted to better fit the modern economic system.

According to one study around 40% of Muslims rejected non-sharia loans, which is around 700 million people, a massive number.

Despite strong growth potential, serious problems persist in this industry. These range from banks and financial institutions often finding themselves unable to reach large proportions of their customer base, to a general lack of scholarly consensus with regards to what qualifies as sharia compliant finance.


Covers the background of the Islamic finance industry

States the most common types of Islamic financial services

Outlines in which countries the industry has grown the most and where it has the potential to continue doing so

Assesses serious problems within the industry

Concludes that the strong growth potential of this industry cannot be achieved if these serious problems are not resolved.

Reasons to buy

What is the Islamic finance industry?

Which types of Islamic financial services exist?

Where is this industry the most dominant?

Which serious problems still trouble the industry?

Islamic finance – The Basics
History of Islamic finance
Some major forms of Islamic finance
Islamic finance today – the numbers
Nine countries dominate the Islamic finance industry
Non-Islamic banks and countries increasingly opening up to Islamic finance
Strong Potential for Growth in the Islamic finance Industry
MENA (excluding GCC), West Africa and Central Asia largely untapped
Sharia compliant microfinance schemes have large potential, as a third of Muslims live in poverty
Problems the Islamic finance industry is facing
Lack of access to financial institutions in Muslim majority nations
Political instability discouraging interest
Differences amongst the clergy with regards to what amounts to sharia compliant finance
Strong growth potential in this industry if scholarly consensus, political stability and greater geographic reach can be
Further Reading
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About MarketLine
List of Tables
Table 1: Top nine Islamic finance markets total population’s, 2016
Table 2: Islamic finance national market share in terms of total banking assets, 2015
List Of Figures
Figure 1: Al Rajhi Bank, currently the world’s largest Islamic bank based on assets
Figure 2: David Cameron speaking at the ‘World Islamic Economic Forum’ held in London, 2013
Figure 3: Countries by population living in urban areas, 2015

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