- Bahrain also ranks first globally in Islamic finance regulation
- Value of Sukuk issued in Bahrain increased by 40% to USD5.3 BN, and Net Asset Value of Islamic Funds increased by 142% to reach $27 MN
Bahrain has ranked fourth in the world and second in MENA for Islamic finance development according to the 2021 Islamic Finance Development Indicator – IFDI 2021 by Refinitiv, a London Stock Exchange Group (LSEG) business, the world’s leading provider of intelligent information for businesses and professionals.
The Islamic Finance Development Indicator (IFDI), which provides a detailed look at the current state of the industry measures the overall development in 135 countries based on quantitative development, knowledge, governance, awareness, and corporate social responsibility CSR (Charities and Qard Hasan). The report places Bahrain first globally for Islamic finance regulation and news. Amongst MENA countries, Bahrain ranked first in awareness, governance, corporate social responsibility activities and Islamic finance knowledge. Bahrain also tops the ranking in the region for Islamic banking, and corporate governance.
Commenting on Bahrain’s global position as a leader in the development of Islamic finance, Mr. Khalid Hamad Al Hamad, Executive Director of Banking Supervision at the Central Bank of Bahrain (CBB), said, “We have seen the total value of Islamic finance assets reach US$ 102 billion in Bahrain in 2020, making Bahrain among the top 10 countries globally in Islamic finance & banking assets. This clearly demonstrates that Bahrain has become the regional hub for Islamic finance supported by a robust and business-friendly regulatory framework that has been recognised as industry-leading by the IFDI report.
“We will continue our efforts to further develop the financial services ecosystem. This industry is the largest contributor to GDP after oil, at 17%, and such efforts are in line with the recently announced Economic Recovery Plan which includes a number of growth and development initiatives with the aim of increasing the contribution of non-oil sectors to GDP.”
According to the report the net asset value of Islamic Funds in Bahrain during 2020 increased by 142% to reach $US27 million and the value of Sukuk issued increased by 40% to USD5.3 billion when compared to 2019. Additionally, the number of institutions offering degrees in Islamic Finance increased by 14%, contributing to Bahrain attaining 2nd position in the GCC for Education in Islamic finance.
The report, which is in its ninth edition and entitled Advancing Economies, shows that the world’s Islamic finance industry saw double-digit growth of 14% in 2020 to a total US$3.37 trillion in assets. IFDI projects the size of the Islamic finance industry to rise to $4.94 trillion in 2025. The report also forecasts that digitisation and sustainable finance will continue to be main trends in 2022 and beyond. To view the Islamic Finance Development Report 2021, please visit this link.