Bahrain, UAE and Saudi ranked among world’s top five Islamic finance economies

Bahrain, the UAE and Saudi Arabia are ranked among the world’s top five Islamic finance economies in 2020 by the Islamic Finance Development Indicator (IFDI).

Bahrain, which has led MENA in all eight IFDIs to date, ranked in third place globally this year, with the UAE and Saudi Arabia ranking fourth and fifth respectively. A total of 135 countries are ranked as part of the index.

The report cited Bahrain’s robust and supportive regulation for Islamic finance and banking as well as increases in the number of Islamic banking assets as key to the high ranking.

The survey recognised UAE’s efforts in the governance space, highlighting the banking, takaful and sukuk regulations that were introduced in 2019, as well as the unified global legal framework for Islamic finance launched in May 2020. The UAE was also recognised as the top Islamic Finance educator in the region boasting the highest number of Islamic Finance Education Providers across the GCC at 52 – including 12 that provide degrees.

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The IFDI is part of the annual Islamic Finance Development Report produced by Refinitiv and the Islamic Corporation for the Development of the Private Sector (ICD), the private sector development arm of the Islamic Development Bank (IDB).

The IFDI provides an annual rank for each economy in the global Islamic finance industry, aggregating scores across five areas – quantitative development, knowledge, governance, corporate social responsibility, and awareness.

“Bahrain was the first in the region to develop a strong banking community and is now building one of the most concentrated FinTech ecosystems in the world,” said Dalal Buhejji, director, Business Development, Financial Services at the EDB.

“The Islamic finance sector has been a key part of that development, with $96bn of assets held in the Kingdom, which accounts for 124 per cent of Bahrain’s GDP. We are continuously implementing new initiatives and policy tools to further develop Bahrain’s standing in Islamic finance, including new Takaful models and Sharia-compliant investment tools,” he added.