Riyadh
Islamic fintech is a fast-growing segment of financial technology among Organisation of Islamic Cooperation (OIC) countries, with the UAE and Saudi Arabia leading in transaction volume and ecosystem creation.
The Global Islamic Fintech Report (GIFR) 2021 estimated that last year’s volume of Islamic FinTech transactions within OIC countries was at $49 billion.
While that constitutes only 0.7 percent of global FinTech transactions, Islamic FinTechs are projected to grow to $128 billion by 2025 at a 21 percent compound annual growth rate.
Leading in the largest volume of transactions were Saudi Arabia, UAE, Malaysia and Indonesia.
The GIFR also created an index with 32 indicators across five categories (Islamic Fintech market and ecosystem, talent, regulation, infrastructure, and capital) aimed at measuring the ecosystem for fostering FinTechs.
Malaysia, Saudi Arabia, UAE, Indonesia and the UK were the top five countries with the strongest ecosystems, while Kuwait, Pakistan, Qatar, Bahrain, and Jordan were considered as “fast maturing ecosystems.
The GIFR also conducted a global survey of a 100 respondents in the Islamic FinTech industry and found that 56 percent of Islamic FinTechs expect to raise an equity funding round in 2021 with an average round size of $5 million, indicating the continued confidence in the growing ecosystem.
The report was published by Salaam Gateway, a source of information on Halal industries, Islamic finance and Islamic lifestyle.
The respondents identified the main challenges in the industry as lack of capital, consumer education, and finding talent.
Top growth segments in 2021 were identified by the respondents to be payments, deposits & lending and raising funds. FinTech, including Islamic FinTech, is a growing industry globally.
Britain is now home to 27 Islamic FinTechs, which abide by interest-free Sharia laws and avoid unethical investments.—Agencies
