Saturday, September 19, 2020

IFDI 2017 sees Islamic finance play a huge role in sustaining economic growth


  • Islamic finance assets grew 7% to US$ 2.2 trillion in 2016
  • Assets projected to reach US$ 3.8 trillion by 2022
  • Recovery in performance of all Islamic finance sectors as oil prices pick up
  • Governments enhancing regulation to strengthen different areas of the industry
  • Islamic financial institutions looking to consolidation and efficiencies in face of economic slowdown

Thomson Reuters ( – the world’s leading provider of intelligent information for businesses and professionals – and the Islamic Corporation for the Development of the Private Sector (ICD) ( – the private sector development arm of the Islamic Development Bank (IDB) ( – today released the key findings of the fifth edition of the Islamic Finance Development Report and Indicator (IFDI) at the World Islamic Banking conference (WIBC) 2017 held in Bahrain.

The report studied key trends across five indicators used to measure the development of the US$2.2 trillion Islamic finance industry which are: Quantitative Development, Knowledge, Governance, Corporate Social Responsibility and Awareness. It also compiled extensive statistics on the industry from 131 countries and highlighted the best-performing countries within each key area of performance.

The IFDI global average value, which acts as a barometer of the overall industry’s development, recovered to 9.9 in 2017 from 8.8 in 2016. This reflected improved performances in each of the five indicators. Malaysia, Bahrain and the UAE lead the IFDI country rankings for the fifth consecutive year, while the GCC remains the leading regional hub for the industry. Countries in the Commonwealth of Independent States (CIS), Europe, East and West Africa saw notable improvements in their IFDI values, demonstrating the continued growth of Islamic finance in non-core markets.

The report also highlights how Islamic finance can help countries adapt to difficult economic conditions.

Nadim Najjar, Managing Director of Thomson Reuters in the Middle East and North Africa, said: “We have seen that the Islamic finance industry can serve as a strategic tool for policymakers for sustainable growth in order to cope with the aftermath of the economic slowdown that impacted markets such as the Middle East. Some markets had noteworthy improvements in their IFDI values when they have improved or introduced Islamic finance to fit their economic needs and attract investments like Morocco, Tunisia and Iraq.”

Khaled Al Aboodi, CEO of ICD, said: “Incorporating Islamic finance in different strategies can be seen in the many steps taken by governments across different IFDI indicators. This was noticed when some authorities intervened in Islamic social funds management, raised literacy in the industry among potential market players through formal education systems, organized roadshows targeting potential market players, or built a roadmap to plot development of the overall industry.”

Islamic finance sector recovers strength and assets continue to grow

Quantitative Development, which measures the performance of Islamic financial institutions and capital markets, advanced the most of the five indicators as a partial recovery in oil prices helped Islamic financial institutions and mutual funds regain strength. Sukuk grew least of the Islamic finance sectors as some large sovereign issuers resorted to conventional bonds to ease the issuance process and lower costs. Yet even here, sukuk showed signs of promise as new players came to market and Saudi Arabia emerged as a new sovereign sukuk giant. There was also an increase in consolidation within the industry. Mergers were agreed between Islamic financial institutions in the GCC, Pakistan, Indonesia and Malaysia that are likely to strengthen their competitive edge.

The reversion to strength after last year’s oil price-led downturn saw total Islamic finance industry assets rise 7% to US$ 2.2 trillion in 2016 and it is expected that assets will continue to rise, to US$ 3.8 trillion by 2022.

Governments looking to improve Islamic finance education and literacy

The Knowledge indicator, which encompasses education and research, also edged higher in the latest report. There were 677 Islamic finance education providers in 2016, of which 191 provided a total of 322 Islamic finance degrees. Governments in Bahrain, Malaysia and Indonesia made particular efforts to push Islamic finance education and literacy.

Governments improving regulatory regimes to encourage industry

As governments sought to push Islamic finance to help revive economies hit by the fall in oil prices, Governance gained the most of the five indicators. Each of its Regulation, Shariah Governance and Corporate Governance sub-indicators showed improvement. The number of Shariah scholars increased, and several countries began to push for external Shariah scholars and centralized Shariah boards. There were 44 countries in 2016 with specific Islamic finance regulations. Many of these pushed for takaful regulations or tax concessions for sukuk.

Corporate social responsibility another strong gainer, though disclosure still too low

The indicator for Corporate Social Responsibility (CSR) was another strong gainer, with improvements in both performance and disclosure by Islamic financial institutions. The total CSR funds disbursed by different Islamic financial intuitions increased 18% over the year, to US$ 683 million. The number of institutions reporting CSR activities also increased, but the global average for reporting disclosure remains low. Despite this, there are developments that will contribute to a stronger CSR in the future including interventions in managing zakat, waqf and charity by the governments of the UAE, Malaysia and Indonesia.

Conferences and seminars exploring mutual values of Islamic and ethical finance

As governments turned their attention towards Islamic social financing, a growing number of conferences and seminars explored the common ground between Islamic and ethical finance, particularly in Europe. This helped the Awareness indicator to edge higher, despite a slowdown in growth of news articles on the industry. Other popular themes of conferences and seminars included socially responsible investing, sukuk, and microfinance. The rise in number of Islamic microfinance events was particularly noticeable in Africa.


Quick look at Nvidia’s new RTX 3080

Nvidia is promising big things with the GeForce RTX 3080 graphics card. “Twice the performance” of the RTX 2080 is perhaps the biggest claim...

CBB warns consumers when dealing with personal and banking information

The Central Bank of Bahrain (CBB) called on consumers to be cautious and vigilant when dealing with their personal and banking information. This warning came...

“Virtual Bahrain 2020” conference, exhibition kicks off Tuesday

Under the patronage of Mohammed Ali Al Qaed, Chief Executive of the Information and eGovernment Authority, the "Virtual Bahrain 2020" conference and exhibition will...

Virtual meeting by Rotary Club of Salmaniya

The Rotary Club of Salmaniya held its regular virtual meeting on Wednesday 2nd September 2020. The club was privileged enough to have internationally renowned...

Carrefour Bahrain Introduces ‘Click and Collect’: The Latest Innovation for Faster and More Flexible Online Shopping

Carrefour, operated by Majid Al Futtaim in the Kingdom of Bahrain, is introducing Click and Collect, a new service that will give online shoppers...

HH Khalid bin Hamad congratulates ‘Your Talent at Home’ winners

First Deputy Chairman of the Supreme Council for Youth and Sport (SCYS) and President of Bahrain Olympic Committee (BOC) His Highness Shaikh Khalid bin...

AI Ethics by Dr. Jassim Haji

There global agreement among modern Artificial Intelligence professionals that Artificial Intelligence falls short of human capabilities in some critical sense, even though AI algorithms...

Health Minister receives Indian ambassador

Health Minister Faeqa bint Saeed Al Saleh, received Indian Ambassador to Bahrain Piyush Srivastava. The minister praised the historical relations between Bahrain and India in...

Bahrain marks World Patient Safety Day

Bahrain joins the world in marking the World Patient Safety Day observed on September 17. This year's theme is “Health Worker Safety: A Priority...

stc Bahrain joins stc Group as the diamond sponsor of Virtual Capacity Middle East

stc Bahrain, a world-class digital enabler, joins stc group Kuwait and KSA as a Diamond sponsor of the virtual Capacity Middle East Conference 2020,...

HM King’s humanitarian initiatives lauded by Sudan’s foreign minister

Sudan’s Acting Foreign Minister Omar Qamar Al Din Ismail has praised the support of His Majesty the King to Sudan in various circumstances and...

Ebrahim K. Kanoo Hosts First INJAZ Bahrain Virtual Job Shadow Event

The Ebrahim K. Kanoo company has hosted the first ever INJAZ Bahrain Virtual Job Shadow event in Bahrain showcasing the different aspects of the...

RHF Secretary-General visits flood-affected areas in Sudan

Royal Humanitarian Foundation (RHF)'s Secretary-General Dr. Mustafa Al-Sayed, visited some areas affected by the floods and torrents that swept Sudan. This came under the directives...

Manage Your eVisa Requests Quickly and Easily on

Obtaining or renewing visas in the Kingdom of Bahrain is a relatively simple procedure. All you need to do is ensure that your documents...

Interior Minister: valid PCR certificates for entry to Bahrain via causeway

The Interior Minister General Shaikh Rashid bin Abdullah Al Khalifa said that Polymerase chain reaction (PCR) certificates accredited by the Saudi Health Ministry within 72...