Islamic finance grows in non-Muslim markets with demand for ethical investing

State support, population trends, and ethical investing are spurring the demand.

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Non-Muslim markets that seek transparency and want to avoid harmful or unethical industries are turning to Islamic finance, whose assets are expected to grow 36% to $7.5t by 2028, according to Standard Chartered Plc.

The growing number of young and Muslim people in countries like Indonesia, Pakistan, Egypt, and across Sub-Saharan Africa, apart from a state push for Islamic banking, is also fuelling the growth, the British bank said in a May report.

“Islamic neobanks, crowdfunding, and blockchain platforms are enabling ease of accessibility and convenience amongst youth and the unbanked populations,” Khurram Hilal, CEO of Standard Chartered Saadiq, told Asian Banking & Finance.

Established leaders like Malaysia and emerging markets like Brunei, Indonesia, Singapore, and Hong Kong are also driving innovation in Islamic financial products in Asia, he told the magazine.

In 2024, the global Islamic finance industry's assets rose 12% to $5t from a year earlier, the British lender said, citing data from the London Stock Exchange Group.

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