Research by the Islamic Development Bank and Refinitiv puts Kingdom in the lead regionally and second globally
Seventh consecutive first-place ranking based on robust and supportive regulation and increases in number of Islamic Banking Assets and number of institutions offering Islamic Finance
Continued success comes despite backdrop of slowing growth in the Islamic Banking sector globally
Jakarta, November 13th – Bahrain has topped the entire MENA region for Islamic Finance development, according to the seventh and latest annual Islamic Finance Development Indicator (IFDI). The Kingdom, which has led MENA in all seven IFDIs to date, also ranked in second place globally this year. The IFDI is part of the annual Islamic Finance Development Report produced by the Islamic Development Bank’s private sector development arm – the Islamic Corporation for the Development of the Private Sector (ICD) – in partnership with information provider Refinitiv. Key findings of the report and the IFDI were released today at the Indonesia Sharia Economic Festival in Jakarta.
The IFDI provides an annual rank for each economy in the global Islamic finance industry. It aggregates scores across five component areas – quantitative development, knowledge, governance, corporate social responsibility, and awareness – for the 131 countries where Islamic finance has a presence. Bahrain’s continued high ranking is based upon its robust and supportive regulation for Islamic finance and banking as well as increases in both the number of Islamic banking assets and the number of institutions offering Islamic finance. This success came despite a global slowing of growth in the Islamic banking sector.
The report highlighted FinTech as a key driver and shaper of the Islamic finance industry, noting that crypto-assets are also being explored by sharia scholars and regulators in developed Islamic finance markets such as Bahrain and Malaysia. For example, Rain – the region’s first sharia-compliant cryptocurrency exchange – was the first graduate from the Central Bank of Bahrain’s FinTech Regulatory Sandbox, earlier this year, and has recently obtained a full operational license.
Ayman Sejiny, CEO of ICD, said: “Despite the stressed global economic environment and sluggish growth which are impacting the industry, we have found that the dynamics in the industry are changing. Sukuk are leading the industry’s growth, with global issuance since its introduction surpassing US$ 1 trillion in 2018 and continuing to grow. The industry and surrounding ecosystem are also being constantly reshaped by innovation. This is particularly in the areas of financial technology and sustainability which aligns with the strategies of ICD.”
Khalid Humaidan, Chief Executive at the Bahrain EDB said: “It’s a pleasure to once again see Bahrain leading the region in Islamic Finance development. The Kingdom has worked hard to position itself not just as the region’s FinTech hub, but also as a testbed for regulating emerging and cutting-edge technologies such as blockchain and open banking. Our continued high ranking in the IFDI is testament to our innovative and pioneering approach.”
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Communications and Media Department
Economic Development Board
About Bahrain Economic Development Board
The Bahrain Economic Development Board (EDB) is an investment promotion agency with overall responsibility for attracting investment into the Kingdom and supporting initiatives that enhance the investment climate.
The EDB works with the government and both current and prospective investors, in order to ensure that Bahrain’s investment climate is attractive, to communicate the key strengths, and to identify where opportunities exist for further economic growth through investment.
The EDB focuses on several economic sectors that capitalise on Bahrain’s competitive advantages and provide significant investment opportunities. These sectors include financial services, manufacturing, ICT, tourism, logistics and transport.
For more information on the Bahrain EDB visit www.bahrainedb.com; for information about Bahrain visit www.bahrain.com.
About the Islamic Finance Development Indicator
Developed by ICD and Refinitiv, the Islamic Finance Development Indicator is a composite weighted-index that measures the overall development of the Islamic Finance industry by providing an aggregate assessment of the performance of all its parts, in line with the objectives of Islamic principles.
The indicator is released annually, along with a full report detailing each country- and unit-specific indicator and their raw numbers.
Each indicator within the composite indicator’s constituents is equally weighted and aggregated. In addition, normalization is required prior to any data aggregation as the variable indicators in a data set have different measurement units.
For the Country Composite Indicator level, indicators are normalized to allow for meaningful comparisons over time for a given country and between countries. Various economic indicators (e.g., population size) are considered, while the health of the Islamic finance industry is measured in each country.
To learn more about the indicator, please visit https://www.zawya.com/islamic-finance-development-indicator/