Islamic finance volume is expected to hit $2.5 trillion this year experts have predicted.
This is despite the fact that last year did not prove to be much beneficial for Global Islamic Banking and Finance Industry as expected because of various reasons which include Middle East political situation, sharply down in oil prices, and international trade wars between two power.
According to the Chief Executive Officer of AlHuda Center of Islamic Banking and Economics, Zubair Mughal, 2019 is starting with high hopes for Islamic banking and finance industry and its volume is expected to reach at $2.5 Trillion in the year 2019.
“The total share of Islamic banking industry within Islamic Finance industry would be 81%, while Takaful, Sukuk, and Islamic microfinance have share of 2%, 11%, and 1% respectively of the total volume. Whereas, Islamic stock markets, Ijarah companies, Islamic REIT’s etc. has 5% share of total Islamic Finance industry.” He said.
The CEO noted that Islamic banking and financial industry growth will continue at the precedent percentage and more new institutions will start their operations in Islamic banking. The average growth of the industry will remain the same in Middle East.
“Tanzania and Kenya are expected to introduce and enhance regulatory framework for Islamic financial industry and It will have direct positive effect for the growth of the industry. Moreover, Uganda and Ethiopia would also be claiming the same growth.” He said adding that whereas, in West Africa, Nigeria and Senegal will record the growth of the industry by enhancing the market base of Islamic microfinance and Islamic bonds (Sukuks) and in North Africa, the Moroccan Islamic financial industry will emerge.
Mr Mughal also noted that French speaking countries are taking more interest in Islamic banking and finance phenomenon.
“In 2019, Ivory Coast, Burkina Faso, Mauritania, Cameroon, Chad, Male, Algeria, Niger etc. are expected to grow in Islamic banking industry, The reason behind this growth in the Francophone countries is also the interest of Islamic Development Bank’s (IsDB) projects in which financing will be made on Islamic banking rules.” He said.
According to Mughal, the Islamic banking and finance demand in Malaysia, Indonesia, Pakistan and Bangladesh in Asia will increase due to their religious attachments.
Pakistan’s new Government moto “Riyasat e Madina” will attract Islamic banking and finance in more attractive way. Whereas, Kazakhstan and Uzbekistan will also grow in this industry in Central Asia. In 2019, Russia will also grow tremendously in Islamic banking industry.
In India, he said, after elections, the Reserve Bank of India (RBI) is expected to allow for Islamic banking so that 200 million people would be able to avail the financial system coherent with their beliefs. He said, now the Islamic banking is not limited to only Muslim countries but also flourishing in non-Muslim countries. More-than 100 countries are practicing Islamic banking and finance including UK, USA, Japan, Russia, Germany, and South Africa with more-than 3000 Islamic banking and financial institutions.
In 2019, unfortunately, the Takaful industry is not expected promising due to certain reasons and the same was observed in 2018. But the Sukuk industry is expected to grow and it is projected that new Sukuk would be issued. Islamic microfinance is emerging tremendously for poverty alleviation and most of the countries are including in their policy part. It is expected that the volume of Islamic microfinance industry will shift from 1% to 2% in 2019 due to its importance.