London: Cambridge Institute of Islamic Finance (Cambridge-IIF) today launched the 11th annual edition of the Global Islamic Finance Report (GIFR). The launch ceremony was held virtually in collaboration with Minhaj University Lahore (MUL) that has over the last three years served as Knowledge Partner for the report. It was first of a series of launch ceremonies planned for different regions. The event was moderated by Dr Rizwan Malik, Senior Manager at Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
In this phased launch of the report, the first ceremony included four presentations. Tabinda Hussain, Editor of the report, gave an overview of the contents, mentioning that the report was divided into four parts. Part 1 presents an overview of the global Islamic financial services industry and includes the pioneering Islamic Finance Country Index, first developed by GIFR in 2011. Part 2 is structured around Islamic social finance and its scope and potential in the development process in the countries comprising the Organisation of Islamic Cooperation (OIC). It also explores synergies between Islamic finance and the Sustainable Development Goals (SDGs). Part 3 focuses on the role of zakat, waqf and sukuk in Islamic social finance. The last part is an analysis of the use of technology in Islamic social finance.
In his presentation, Dr Humayon Dar, Editor-in-Chief, highlighted five key facts about the global Islamic financial services industry. Firstly, the assets under management of Islamic banking and financial institutions around the world have attained the size of US$2.733 trillion. Secondly, while the Islamic financial assets continue to grow the rate at which this is happening has for the last six years been declining. Thirdly, the annual growth of the Islamic financial assets since the publication of the last edition of GIFR has been 5.5%. The average annual growth rate of the industry over the last 10 years is still significant, that is 11.7%. Fourthly, Islamic banking and finance remains at best a banking phenomenon, as 74% of the global Islamic financial assets are held by banks, both fully-fledged Islamic banks and the conventional banks offering Islamic banking services. Fifthly, there is a visible increase in the share of sukuk in the global Islamic financial AUM, from 15% in 2018 to around 17% according to the latest data.
The Top 10 countries ranked by IFCI are Malaysia, Indonesia, Iran, Saudi Arabia, Sudan, Pakistan, Brunei Darussalam, United Arab Emirates, Bangladesh and Kuwait. Malaysia has this year taken over from Indonesia that was ranked No. 1 in the 2019 IFCI rankings.
Over the last 10 years, there have been some interesting stories taking shape with respect to IFCI. In 2011, Bangladesh was only a marginal country as per the IFCI rankings but over the past 10 years, it has surpassed even Bahrain to become what GIFR categorises as an Exceptional Islamic Finance Market. Bahrain has also developed over the last 10 years, and it is classified as a Significant Islamic Finance Market.
It is important to highlight that GIFR classifies all the countries included in IFCI into five categories:
Insignificant - those with IFCI score of less than 10; Marginal - those which have IFCI score between 10 and 20; Moderate - those for which IFCI lies between 20 and 30; Significant - those with IFCI score of 30 to 40; and Exceptional - those that have IFCI score exceeding 40.
Accordingly, there are 10 Exceptional Islamic Finance Markets; 3 significant Islamic Finance Markets; 3 Moderate, 2 Marginal and 30 still insignificant.
There are three significant gainers this year. These include Senegal that jumped 20 places from 47 to reach the 27th position on the index. Nigeria jumped 5 places to become the 21st Most Important Islamic Finance Market in the world. Pakistan jumped 4 places to become the 6th Most Important Islamic Finance Market.
© Press Release 2021
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