Islamic finance posts double-digit growth in 2025: Zubair Mughal
Dubai – UAE: The global Islamic finance industry has steadily evolved from a niche, alternative financial system into a systemically important component of the international financial architecture. Grounded in Shariah principles that emphasize risk sharing, asset-backed transactions, and social justice, Islamic finance today represents a diversified ecosystem encompassing banking, capital markets, insurance (takaful), FinTech, and social finance instruments.
According to the statement, its expansion has been propelled not only by the demographic momentum of a global Muslim population exceeding two billion, representing more than 25% of the world’s population, but also by rising interest from non-Muslim markets seeking ethical, resilient, and values-based financial solutions. In recent years, Islamic finance has demonstrated a notable capacity to sustain growth despite global macroeconomic tightening, elevated inflation, geopolitical disruptions, and financial market volatility, reinforcing its growing relevance within the global financial system.
As of the most recent industry assessments, total global Islamic finance assets reached at 5.2 trillion USD and continue to expand at a pace that compares favorably with, and in some cases exceeds, the conventional financial sector growth average pace.
According to international standard-setting and industry monitoring institutions, global Islamic finance assets grew by approximately 14.9% year-on-year in 2025, reaching nearly USD 5.2 trillion, compared to average single-digit growth in many conventional banking markets.
Forward-looking projections suggest that total assets are on track to cross USD 6 trillion by the end of 2026, supported by strong balance-sheet expansion in Islamic banking, accelerating Sukuk issuance volumes, and the rapid digitalization of Shariah-compliant financial services. Stock Market Sheds Amid Voltality
The Islamic Financial Services Industry entered 2025 with renewed momentum, recording double-digit growth across its core sectors and benefiting from regulatory reforms, stronger prudential oversight, and the gradual opening of new jurisdictions, particularly across Africa and selected European markets. This sustained performance underscores the intrinsic resilience of Islamic finance, derived from its close linkage to the real economy and its structural avoidance of excessive leverage, speculation, and interest-based transactions.
Despite this positive trajectory, the structure of the Islamic finance industry remains highly concentrated. Islamic banking continues to dominate the landscape, accounting for approximately 72% of total industry assets, equivalent to more than USD 2.7 trillion globally. While this dominance provides scale and systemic depth, it also highlights persistent structural imbalances. Sukuk represents the second-largest segment, with an estimated share of 18% depending on classification, corresponding to more than USD 900 billion in outstanding value globally. Sukuk has become a critical funding and liquidity management instrument
