Islamic Finance Market Report 2026

The islamic finance market size has grown rapidly in recent years. It will grow from $8.94 billion in 2025 to $10 billion in 2026 at a compound annual growth rate (CAGR) of 11.8%. The growth in the historic period can be attributed to increasing muslim population with banking needs, expansion of islamic banking institutions, growth in sovereign sukuk issuances, rising awareness of shariah-compliant finance, development of islamic financial regulations.

The islamic finance market size is expected to see rapid growth in the next few years. It will grow to $15.47 billion in 2030 at a compound annual growth rate (CAGR) of 11.5%. The growth in the forecast period can be attributed to growing adoption of digital islamic finance platforms, increasing cross-border islamic investments, expansion of sustainable islamic finance products, rising demand for takaful solutions, integration of fintech in shariah-compliant services. Major trends in the forecast period include expansion of shariah-compliant digital banking platforms, rising demand for ethical and asset-backed financing, growing issuance of sukuk instruments, increased focus on financial inclusion initiatives, integration of regtech for shariah compliance.

An increase in the Muslim population is expected to drive the growth of the Islamic finance market going forward. The Muslim population is rising due to high fertility rates and a relatively young demographic. Muslim communities use Islamic finance to manage their financial needs in accordance with Shariah law, which prohibits interest and promotes ethical, risk-sharing financial practices, ensuring their financial activities align with religious beliefs and values. For instance, in June 2024, according to the Alliance for a New Middle East Peace (ALLMEP), a US-based non-profit organization, Israel’s Muslim population was estimated at 1.782 million at the end of 2023, representing 18.1% of the total residents and marking an increase of 35,000 from 2022. Therefore, the growing Muslim population is fueling the expansion of the Islamic finance market.

Leading Islamic finance companies are focusing on innovating financial products, such as digital banking platforms, to gain a competitive edge. Digital banking platforms are online services provided by financial institutions that allow customers to conduct banking activities electronically, such as managing accounts, making transactions, and accessing financial products via the internet or mobile applications. For instance, in March 2023, Salaam Bank Limited, a Uganda-based commercial financial institution, launched its first-ever interest-free commercial banking system and digital banking platforms, enabling operations in line with Islamic principles. The bank’s national operations indicate that Islamic banking can significantly contribute to Uganda’s financial sector development and attract more Muslims to invest in the country’s economy.

In May 2024, Al Salam Bank B.S.C., a Bahrain-based financial institution, acquired Kuwait Finance House Bahrain B.S.C. for an undisclosed amount. This acquisition aligns with Al Salam Bank’s growth strategy, including expanding its portfolio and strengthening its position as the fastest-growing Islamic bank in Bahrain. Kuwait Finance House Bahrain B.S.C. is a Bahrain-based Islamic finance provider.

Major companies operating in the islamic finance market are Maybank Islamic, Abu Dhabi Islamic Bank Egypt, Al Rajhi Bank, Kuwait Finance House, Al Baraka Bank, Bank ABC Islamic, HSBC Amanah, First Security Islami Bank, Al-Arafah Islami Bank, Social Islami Bank, Al Salam Bank, Ajman Bank, Al Hilal Bank, Bank Islam Brunei Darussalam, Bank Nizwa, Iraqi Islamic Bank of Inv & Dev, Affin Islamic Bank, OCBC Al-Amin Bank, Barwa Bank, Etiqa Islamic Berhad.

Middle East And Africa was the largest region in the islamic finance market in 2025. Asia-Pacific is expected to be the fastest-growing region in the market. The regions covered in the islamic finance market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the islamic finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The islamic finance market includes revenues earned by entities by providing services such as sharia-compliant banking services, investment products, leasing (ijarah), trade financing (murabaha), and asset management services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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