World Islamic finance assets grow by 14.9% in 2025 – think tank
Global Islamic finance assets grew by 14.9 per cent in 2025, reaching $5.2tn, with fintech being the fastest-growing segment of the world Islamic finance industry, according to AlHuda Centre of Islamic Banking and Economics (CIBE), a research company.
The industry’s assets are likely to climb to $6tn in 2026, CIBE forecasts.
Banking remained the backbone of Islamic finance in 2025. It accounted for 72 per cent of the industry’s total assets, the Dubai-headquartered think tank said in a statement.
There was intensive banking activity in Gulf and Asian countries while several African jurisdictions showed growth of more than 20 per cent, signalling a “gradual but meaningful geographical rebalancing of Islamic banking activity”, CIBE statement said.
Sukuk, bond-like instruments compliant with Islamic sharia law, represented one of the industry’s most dynamic segments with issuance volumes swelling by 25 per cent. Takaful insurance deals are estimated to have gone up by between 15 and 17 per cent.
Yet the industry’s fastest-growing subsector was financial technology, CIBE said, citing the State of the Global Islamic Economy Report 2024/25, a report by the New York-based research and advisory firm DinarStandard.
Islamic fintech, which controls a comparatively small share of the industry’s total assets, increasingly targets underbanked and unbanked populations and hence is “a critical driver of financial inclusion”, CIBE said.
Geographically, Asia and the Gulf accumulate more than half of the world’s Islamic finance assets. But their dominance is likely to gradually diminish, CIBE warned, because of what the firm sees as the growing role of African and Western markets.
In Europe, Albania, a country where about half the population is Muslim, “has already established itself as a functioning Islamic banking market”, CIBE said.
According to CIBE, Islamic finance has problems such as insufficient liquidity, structural overreliance on banking and regulatory limitations in frontier markets.
The industry also needs better policy coordination, wider adoption of international prudential standards and sustained investment in market infrastructure, CIBE argued.