MANAMA: Bahrain has ranked fourth in the world and second in Mena for Islamic finance development according to the 2021 Islamic Finance Development Indicator – IFDI 2021 by Refinitiv.
The Islamic Finance Development Indicator (IFDI), which provides a detailed look at the current state of the industry measures the overall development in 135 countries based on quantitative development, knowledge, governance, awareness, and corporate social responsibility CSR (Charities and Qard Hasan).
The report places Bahrain first globally for Islamic finance regulation and news.
Amongst MENA countries, Bahrain ranked first in awareness, governance, corporate social responsibility activities and Islamic finance knowledge.
Bahrain also tops the ranking in the region for Islamic banking, and corporate governance.
Commenting on Bahrain’s global position as a leader in the development of Islamic finance, Khalid Hamad, executive director of banking supervision at the Central Bank of Bahrain (CBB), said: “We have seen the total value of Islamic finance assets reach $102 billion in Bahrain in 2020, making Bahrain among the top 10 countries globally in Islamic finance and banking assets. This clearly demonstrates that Bahrain has become the regional hub for Islamic finance supported by a robust and business-friendly regulatory framework that has been recognised as industry-leading by the IFDI report.
“We will continue our efforts to further develop the financial services ecosystem. This industry is the largest contributor to GDP after oil, at 17pc, and such efforts are in line with the recently announced Economic Recovery Plan which includes a number of growth and development initiatives with the aim of increasing the contribution of non-oil sectors to GDP.”
According to the report, the net asset value of Islamic Funds in Bahrain during 2020 increased by 142pc to $27 million and the value of sukuk issued increased by 40pc to $5.3 billion when compared to 2019.
Additionally, the number of institutions offering degrees in Islamic finance increased by 14pc, contributing to Bahrain attaining the 2nd position in the GCC for education in Islamic finance.
The report, which is in its ninth edition and entitled Advancing Economies, shows that the world’s Islamic finance industry saw double-digit growth of 14pc in 2020 to a total $3.37 trillion in assets.
IFDI projects the size of the Islamic finance industry to rise to $4.94trn in 2025.
The report also forecasts that digitisation and sustainable finance will continue to be main trends in 2022 and beyond.
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