Saudi Arabia Islamic Finance Market to Reach USD 1,240 Billion by 2028

Saudi Arabia Islamic finance market is growing because of the dominant Muslim population and their shift towards Shariah-compliant products along with favorable government initiatives such as sukuks debt issuance program

A recent study conducted by the strategic consulting and market research firm,Report Ocean, revealed that the Saudi Arabia Islamic finance market is projected to grow from USD 945 billion in 2021 to USD 1,240 billion by 2028, exhibiting a CAGR of around 4% during the forecast period of 2022-2028. Saudi Arabia is the largest market for Islamic finance. The dominant Muslim population and their shift towards Shariah-compliant products act as a major driving factor for the Islamic finance market. According to official statistics, 90% of Saudi citizens are Sunni Muslims while 10% are Shia. Furthermore, favorable government initiatives such as Sukuks debt issuance program also significantly contributed to the growth of the Saudi Arabia Islamic finance market.

Saudi Arabia Islamic Finance Market - By Financial Sector

Based on the financial sector, the Saudi Arabia Islamic finance market is segmented into Islamic banking, Islamic insurance: Takaful, Islamic bonds 'Sukuk', Islamic funds, and other Islamic financial institutions (OIFI's). The Islamic banking segment accounts for the largest market share. This segment offers a wide range of services including Musharaka, Mudaraba, Murabaha, Musawama, Leasing, Salam, and Istisna, that are in compliance with Shariah law. Furthermore, limited risks involved in Islamic banking compared to conventional banking are also propelling the growth of the market.

Impact of COVID-19 on Saudi Arabia Islamic Finance Market

The Islamic finance market was negatively impacted by the unprecedented COVID-19 pandemic outbreak. The pandemic burdened the economic growth of Saudi Arabia. The demand for Sukuk registered a significant decline during this period, directly affecting the liquidity and stability of the Saudi Arabia Islamic finance market. However, the market is projected to gain traction in the post-lockdown period as the financial transactions surge amid the lockdown upliftment.

Competitive Landscape

The leading market players of the Saudi Arabia Islamic finance market are Al-Rajhi Bank Saudi Arabia, Al Jazeera Bank, Al-Bilad Bank, Alinma Bank, SABB Islamic Financial Solutions, Dubai Islamic Bank, Samba's Islamic Banking Division 'IBD', and other prominent players.

The Saudi Arabia Islamic finance market is fragmented with the presence of many industry players. The market is also highly competitive and the banks and financial institutions often launch new products in compliance with Shariah Law to expand their consumer base. Furthermore, the adoption of competitive strategies such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.

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The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Saudi Arabia Islamic finance market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Saudi Arabia Islamic finance market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.