WORKING HOURS

9:00am to 06:30pm

CALL US

+91 11 29945946

MAIL US

info@icif.in

Growth of Islamic Finance to Facilitate Financial Inclusion

Growth of Islamic Finance to Facilitate Financial Inclusion

 

 Naveed 27th June 2015

The growth of the Islamic finance industry offers important potential benefits, the IMF stated in its IMF Research June 15 bulletin.

The IMF stated the sector could facilitate financial inclusion by increasing access to banking services to underserved Muslim populations. Furthermore the risk-sharing characteristics of Islamic financial products can facilitate access to finance by small- and medium-sized enterprises (SMEs) whilst the asset backed nature of Sukuk makes them suitable for infrastructure financing that can help spur economic development, including creating an enabling environment for private sector investment.

However, to realize the potential and to safeguard financial stability, countries need to adapt their regulatory, supervisory, and consumer protection frameworks to the specificities of Islamic finance; to develop Shari’ah-compliant financial markets and monetary instruments; and to build an enabling environment for Sukuk market development.

Industry Growth Trends

The IMF views Islamic finance assets as having reached $1.8 Trillion by end of 2014, a valuation that is consistent with statistics provided by industry bodies such as the IFSB.

IMF Data - Growth trends in Islamic finance broken down into per sector.

IMF Data – Growth trends in Islamic finance broken down into per sector.

Sudan and Iran maintain large domestic markets consistent with values of Sharia and Islamic Banking.

Islamic Banking Assets per Country

Islamic Banking Assets per Country

Global Sukuk Issuance hit a record in 2012 with the IMF suggesting the upward trend remains the direction of travel. The IMF stated whilst the Sukuk market has registered rapid growth in value and the issuer base has broadened, the markets for Sukuk are still neither deep nor liquid, and most issues of Sukuk are asset based and not asset backed. Issuance also takes place without a comprehensive strategy to develop the domestic market.

Global Sukuk Issuance

Global Sukuk Issuance

Regular sovereign issuance, and at different maturities, is critical for deepening the market and establishing a yield (or Sukuk) curve that could provide a benchmark for corporate Sukuk. Increased sovereign issuance should also be underpinned by sound public financial management (PFM), and attention should be given to the accounting and statistical treatment of Sukuk instruments, which are currently largely overlooked in existing international standards.

 
 
http://www.islamicfinance.com/2015/06/growth-facilitate-financial-inclusion-sme-sukuk-imf/
Posted Date : 08 July 2015

News Updates

  • Online admission for second batch of MBA Insurance 2018 - 2020 at Jamia Hamdard

    Online admission for second batch of MBA Insurance 2018 - 2020 at Jamia Hamdard, Deemed University, New Delhi has started. The link is https://admissions. jamiahamdard.edu This insurance course is being run by Jamia Hamdard in collaboration with Asean Institute of Insurance & Risk M...

    Read More
  • ISLAMIC FINANCE EMBRACING SMALL, MEDIUM ENTERPRISES

    There is an ongoing trend in countries with Islamic finance ecosystems of discovering the importance of small and medium enterprises (SMEs) for economic well-being and growth.  Traditionally, SMEs have not played a substantial role in oil-rich Middle Eastern countries where the economy used ...

    Read More
  • INDONESIA PRESIDENT OPTIMISTIC ON GROWTH OF FUNDS FOR MICRO WAKAF BANKS

    Banten, March 14 -- President Joko Widodo (Jokowi) is optimistic that several people would come forward to donate funds to micro 'wakaf' banks in Indonesia, thereby encouraging the development of the micro business sector. "We will push donors as much as possible. I am certain many people want...

    Read More
  • PIL PRAYS FOR ISLAMIC BANKING IN J&K

    High Court Issues Notices; Asks Union Finance Ministry, RBI, J&K Bank, J&K Government To Respond D A RASHID Srinagar, Publish Date: Mar 20 2018 The High Court on Monday asked Union Finance Ministry, Reserve Bank of India, Jammu and Kashmir Government and Jammu and Kashmir Bank to respond t...

    Read More
  • HC ISSUES NOTICES ON FEASIBILITY OF ISLAMIC BANKING

    Srinagar, Mar 19: High Court today sought response from the authorities to the PIL seeking feasibility of introducing Islamic Banking in the State. The Division Bench of Justice Mohammad Yaqoob Mir and Justice D S Thakur granted four weeks time to Union Ministry of Finance, Reserve Bank of India, C...

    Read More
  • ISLAMIC BANKING & FINANCE SUMMIT HELD

    Organized by IBK-Islamic Banking Kashmir On 18th March, Islamic banking and finance summit was held at Hotel City Plaza Durganag Dalgate. The summit was attended by huge gathering besides some key Islamic banking scholars. Dr. Iqbal Malik, the chief coordinator of the event started the proceedin...

    Read More
  • GLOBAL HALAL EXPO INDIA 2018, 31st August-2nd September 2018

    GLOBAL HALAL EXPO INDIA 2018  Co-Located with India Foodex 2018  31st August-2nd September 2018, Bangalore,India Media Today Group, a 22 year old company, is engaged in organizing exhibitions and also publishes trade magazines like Agribusiness & Food Industry , Floriculture Today ...

    Read More