Due to sharply declined trends in Oil
prices, slow economic pace & Arab spring, the trend of the Islamic Banking
& Finance had been slow paced in 2016 in Middle East and Arab region, while
a sufficient development was recorded in Africa, Central Asia & Far East.
especially in African market. For the broader understanding of Islamic Finance
Industry, we can divide Islamic Finance industry into five major components
e.g. Islamic Banking, Sukuk, Islamic Fund/Asset Management, Takaful &
Islamic Microfinance. Islamic Banking is the greatest contributor in Islamic
Finance Industry, which contributes 80% to the total $2.3 trillion Islamic
finance industry, while Sukuk contributing 14% volume in Islamic Finance
industry and ranked as second largest contributor, Islamic Fund/Asset
management Industry with 3% is ranked as 3rd while Takaful Industry is
contributing 2% with slow pace and Islamic Microfinance contributing 1% stands
as last. By 2017, the total volume of Islamic Finance Industry is expected to
be $2.7 trillion.
Indonesia, Malaysia, Turkey, Pakistan, U.A.E, Qatar, Saudi Arabia, Kuwait &
Bahrain are prominent where the contribution of their total assets of Islamic
Banking is 82% to the Global Islamic Banking market. According to the increment
in assets of Islamic Banking, Kingdom Saudi Arabia stands first, but as per new
Islamic Banking market entrance, Morocco, Uganda, China & Russia are
expected to have a good start in Islamic banking by 2017.
According to a research by Mr. Muhammad Zubair Mughal, Chief Executive Officer
– AlHuda Center Of Islamic Banking & Economics (CIBE); There will be a
steady growth of Approx 13% – 15% will be shown in Islamic Finance market
during 2017 and the total volume of Islamic Finance will crossed 3 trillion USD
figure by 2020, which will be accompanied by a definite addition of Sukuk
alongwith Islamic banking. While the Sukuk market in Malaysia, Pakistan, U.A.E,
Turkey, Central Asian countries and Africa seem determined in 2017. According to
the prospects, Sukuk worth 78 billion dollars approximately are expected to be
issued which can define the total volume of outstanding Sukuk up to 350 billion
dollars. It should be clear that ICD will be rendering its contribution in
flourishing Sukuk at global landscape especially in African countries.
It should be clear that Takaful Industry, unfortunately, has lacked far behind
in 2016. While Takaful companies are found default in Pakistan, South Africa
and some other countries due to lack of regulations, performance Issue &
various Models etc. In spite of all these reasons, it is expected that the
total volume of Takaful industry will reach up to 25 billion dollar till the
end of 2017. As far as Islamic Microfinance is concerned, certain positive changes
have been seen in 2016, new microfinance models were introduced with the
amalgamation of Micro-Takaful, Fintech, and social finance along with various
Islamic microfinance products. It is hope that the volume of Islamic
Microfinance could reach up to $2 billion dollars globally by the end of 2017
while the total number of Islamic Microfinance Institutions will reach up to
400 Institutions/Bank.
In 2017, many new Islamic Finance markets are seen to be emerging on the
horizon in the world. If we see on the regional basis, in East Africa, we find
that Uganda has recently passed an Islamic Financial bill through Parliament,
Islamic banking & Finance in Kenya and Tanzania is already flourishing very
well. Morocco & Tunisia are emerging markets in North Africa while Nigeria,
Senegal, Mauritania, Ivory Cost in West Africa has an organized system of
Islamic Finance while Sukuk is also strengthening its roots in these regions.
As far as Central Asia is concerned, 2017 will prove to be a better year with
respect to the previous year.
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