The global Islamic finance industry is poised to exceed $6 trillion in total assets by the end of 2026, driven by strong growth across banking, capital markets, takaful, and Islamic fintech, according to the AlHuda Centre of Islamic Banking and Economics. The sector recorded $5.2 trillion in assets in 2025, representing a 14.9% year-on-year increase.
CEO Zubair Mughal highlighted that despite challenges such as inflation, geopolitical tensions, and tighter financial conditions, Islamic finance has become a systemically important component of the global financial ecosystem. Islamic banking remains the largest segment, representing 72% of total assets, with financing up over 17% and deposits growing nearly 9% in 2025.
Growth was particularly strong in the Gulf Cooperation Council (GCC), Asia, and several African markets, where some countries posted annual increases above 20%. The sukuk market also performed robustly, with global issuance exceeding $230 billion in 2025. New entrants, including Tanzania, Zambia, and Kenya, have helped integrate Africa into global sukuk markets, although secondary market liquidity and a concentrated investor base remain challenges.
Other segments, such as Islamic funds and ESG-aligned financial products, showed moderate growth, while Islamic fintech emerged as the fastest-growing area. Fintech now represents 3% of total Islamic finance assets and is expanding rapidly through digital payments, Shariah-compliant Buy-Now-Pay-Later solutions, embedded finance, and applications of AI and blockchain, particularly across Africa and South Asia.
While Asia and the GCC continue to hold more than half of all Islamic finance assets, Africa is emerging as the fastest-growing frontier. Countries including Ethiopia, Ghana, Uganda, and Somalia/Somaliland are expected to formally enter the market in 2026, and European nations such as Italy, Switzerland, Portugal, and the Netherlands are exploring Islamic banking frameworks.
Looking ahead, Mughal identified opportunities in capital market development, cross-border fintech expansion, and Africa-focused infrastructure financing. However, he cautioned that addressing regulatory gaps, market concentration, and fragmentation is critical to sustaining long-term growth and stability.
“With assets on track to cross $6 trillion, Islamic finance is moving from regional concentration to global relevance,” Mughal said, underscoring the sector’s expanding influence on international finance and its potential to support inclusive economic growth worldwide.
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