LSEG, in collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of the Islamic Development Bank (IsDB) Group, last week announced the results of the 2026 edition of the Islamic Finance Development Report at the Kuala Lumpur Islamic Finance Forum (KLIFF) in Malaysia.
As per the report, while the global Islamic finance industry maintained a strong growth trajectory in 2025, with total assets reaching USD 6.5 trillion, up 9% year-on-year, growth was supported by the continued expansion of Islamic banking, record sukuk issuance, strong Islamic fund performance, and new regulatory frameworks.
Malaysia, Saudi Arabia, the United Arab Emirates (UAE), Indonesia, and Pakistan retained their positions as the world’s most developed Islamic finance markets.
“These countries continued to benefit from comprehensive regulation, strong institutional development, active financial markets, and well-established knowledge ecosystems,” stated the Islamic Finance Development Report, a global benchmark that assesses the development of the Islamic finance industry across 140 countries through five key areas: financial performance, governance, sustainability, awareness, and knowledge.
Several markets recorded notable gains in performance, including Turkey, Tanzania, Kenya, Benin, Azerbaijan, and Uzbekistan, highlighting the growing momentum across both established and emerging Islamic finance markets around the world.
The report also identified several structural trends that are shaping the industry’s development.
“Regulatory reforms and stronger market infrastructure are supporting growth beyond core markets, particularly across Africa and Central Asia. Sustainability guidelines are increasingly prioritised, although activity remains concentrated in developed markets,” the study noted.
Digitalisation is also advancing, with fintech, open banking, and tokenised sukuk influencing financing, issuance, and settlement while widening access to financial products. However, talent development is lagging industry expansion, emphasising the need for stronger specialist education.
Khalid Khalafalla, The acting chief executive officer of ICD said, “For ICD, these developments reinforce the importance of ensuring that Islamic finance serves as a practical instrument for inclusive and sustainable economic transformation. ICD remains committed to advancing private-sector development across its member countries through targeted financing and the promotion of Islamic financial solutions.”
Mustafa Adil, Head of Islamic Finance, LSEG, added: “Looking ahead, global Islamic finance assets are projected to exceed USD 10.5 trillion by 2030, supported by continued Islamic banking expansion, growing sukuk issuance momentum, emerging-market adoption, and demand for sustainable and digital financial solutions.”