According to a new survey of 143 top Islamic Finance professionals from various sectors, they forecast significant growth for the wider Halal economy and their own sector this year, but even better development in the future if the sectors prioritize ESG and sustainability.
Moreover, two-fifths of those polled (41%) believe the Halal economy will grow to $8 trillion or more this year, up from its current estimated $7 trillion value. Only 4% of those polled predict the Halal economy to remain at $7 trillion by the end of the year, while 55% estimate it to be worth between $7 trillion and $8 trillion.
Around 85% believe that Islamic Finance products’ ethical and responsible investing dynamics will increase adoption among non-Muslims and Muslims alike. Growing awareness among global investors of the synergy between Islamic Finance and ESG could drive demand for Shariah-compliant investments as part of diversification strategies, according to up to 87 percent of respondents.
Despite recent double-digit percentage annual growth, they are similarly confident about the Islamic Finance sector, with more than two-thirds (66 percent) expecting the market to exceed estimates of being valued at $3.8 trillion by 2023. By 2023, almost 10% predict it to be valued more than $4.5 trillion.
The research was conducted by Maybank Islamic Berhad, the Islamic banking arm of Maybank Group, and IslamicMarkets.com, a leading platform that provides access to expert knowledge and financial opportunities, to support their upcoming forum entitled ‘Driving Sustainable Impact Through Islamic Finance.’
It found rising support for the idea that implementing ESG and sustainability will help the Halal economy and Islamic finance grow even faster. Over the next three years, 86 percent of those polled expect ESG and sustainability to play a significant role in building the Halal economy. More than a quarter (26%) believe ESG and sustainability will play a larger role in the future.
The increased focus on ESG and sustainability, according to Islamic Finance practitioners, could boost current market growth rates of between 10% and 15% — 58 percent anticipate annual growth rates over the next five years could be more than 15%.
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