Imagine this: in 2024, Islamic finance reached a huge milestone of $5 trillion in total assets! That’s a 12% jump from last year and a massive 43% increase since 2020. And it’s not slowing down anytime soon. A report from Standard Chartered says this number could grow to $7.5 trillion by 2028.
So, what’s driving all this growth? It’s simple: people all over the world are looking for ethical, fair, and Shariah-compliant ways to manage their money.
Islamic Banking The Big Player
Islamic banking remains the biggest part of the industry making up over 70% of all Islamic finance assets. In 2024 alone, Islamic banks held about $4 trillion, and this range ought to attain $5.2 trillion by using 2028.
According to the report titled “Islamic Banking for Financial Institutions: Unlocking Growth Amidst Global Shifts,” this part of the industry is the main engine that keeps everything moving.
It’s Global But Still Focused in a Few Countries
Islamic finance is now active in over 90 countries, and more than 1,980 financial institutions offer Islamic services. But there’s a catch 80% of the money is still concentrated in just five countries:
- Iran
- Saudi Arabia
- Malaysia
- United Arab Emirates (UAE)
- Kuwait
To keep growing, Islamic finance needs to spread out. New countries, banks, and businesses need to jump in and explore the big opportunities ahead.
Sukuk (Islamic Bonds) Are Booming
Another interesting part of Islamic finance is sukuk, frequently referred to as Islamic bonds. Right now, the sukuk marketplace is worth $971 billion and it could attain $1.Five trillion through 2028!Sukuk is already popular in the Gulf countries, Southeast Asia, Türkiye, and Pakistan. Now, countries like Egypt, Kenya, and the Philippines are also getting involved.And here’s something cool: non-Muslim investors are also buying sukuk because they like its ethical and stable nature. This growing interest could make sukuk a major player in global finance.
A New Chapter: Growth, Green Goals & Innovation
Khurram Hilal, the CEO of Islamic Banking at Standard Chartered, says we’re now entering a new era for Islamic finance one focused on:
- Scale (getting bigger)
- Sustainability (doing what’s good for people and the planet)
- Strategy (being smart and future-ready)
With a projected 36% growth by 2028, there’s clear demand for finance that is ethical, inclusive, and Shariah-compliant. Standard Chartered is already offering Islamic banking in 25+ countries and is ready to support this next phase.
Challenges Still Exist
Despite the success, the industry still faces some real challenges:
- Different rules in different countries
- Not enough tools to manage financial risks
- Limited liquidity options for Islamic banks
If these aren’t fixed, the growth could slow down. The report urges governments and banks to work together and create better rules and systems for everyone.
Big Opportunities in Tech, ESG & Partnerships
Standard Chartered’s report highlights three big areas full of potential:
- Innovation – Banks that invest in new technology will lead the way.
- ESG (Environmental, Social & Governance) – People want their money to support good causes. Islamic finance fits well here.
- Global Connections – Stronger ties between countries and Islamic finance hubs will help everything grow faster.
Khurram Hilal says, “If we focus on innovation, build better connections, and stay committed to sustainability, the future of Islamic finance looks very bright.”
Final Thoughts: A Big Future for Islamic Finance
Islamic finance isn’t a niche market anymore. With $5 trillion in assets in 2024 and a path to $7.5 trillion by 2028, it’s becoming a major part of global finance.From Islamic banking to sukuk, the world is looking for fair, ethical, and Shariah-compliant financial solutions. And with the right tools, partnerships, and smart planning Islamic finance could shape the future of money around the world.
FAQs
1. What is Islamic finance, and how is it different from regular banking?
Islamic finance is a way of managing money that follows Islamic law (Shariah). Unlike regular banking, it:
- Doesn’t charge interest (because creating wealth from cash isn’t always allowed)
- Avoids making an investment in things like alcohol, playing, or tobacco
- Focuses on equity each facets share income and risks
It’s built on values like honesty, transparency, and social responsibility, which makes it feel more ethical and fair to many people.
2. Why is Islamic finance growing so fast?
There are two big reasons:
- People need more moral alternatives. Islamic finance avoids risky and harmful investments.
- It works! Many countries guide it, and even folks that aren’t Muslim are starting to apply it because it’s safe, sincere, and developing speedily.
3. What is sukuk, and why is everyone talking about it?
Sukuk is similar to a bond, however it follows Islamic rules. Instead of paying interest, investors earn cash from earnings made by way of an undertaking or asset.
Governments and corporations use sukuk to raise cash in a way that’s Shariah-compliant. It’s turning into greater popular due to the fact:
- It’s trustworthy
- It attracts both Muslim and non-Muslim investors
- It’s seen as a stable and safe option
4. Can non-Muslims use Islamic finance?
Yes, absolutely! You don’t have to be Muslim to use Islamic finance.
Many non-Muslims choose it because it offers:
- Ethical investing
- No hidden charges
- A focus on real assets and shared risk
Plus, Islamic banks often stay strong and steady, even when the economy is struggling.
5. What’s next for Islamic finance?
The future looks very bright!
- In 2024, the industry hit $five trillion in international assets
- By 2028, it’s expected to grow to $7.5 trillion
- More countries are joining, and massive names in banking are investing in Islamic finance
Also, Islamic finance is getting extra linked with inexperienced and sustainable finance, which means it will play a big function within the destiny of worldwide money systems.
Related Post;Islamic Finance Industry Reaches $5 Trillion in 2024 and Aims for $7.5 Trillion by 2028
