Global Islamic finance industry assets are projected to exceed US$10.5 trillion by 2030, up from US$6.5 trillion in 2025, as Islamic banking expands, sukuk issuance grows and adoption spreads across emerging markets, according to the 2026 Islamic Finance Development Report.
The report was released on 21 October by the London Stock Exchange Group (LSEG), in collaboration with the Islamic Corporation for the Development of the Private Sector (ICD), the private-sector arm of the Islamic Development Bank (IsDB) Group. Its findings were announced at the Kuala Lumpur Islamic Finance Forum in Malaysia.
The industry recorded 9% year-on-year growth in total assets in 2025, supported by continued expansion in Islamic banking, record sukuk issuance, strong performance by Islamic investment funds and the introduction of new regulatory frameworks.
Sukuk are financial instruments structured to comply with Islamic principles. Their growing issuance, alongside the expansion of banking and investment products, has contributed to the industry’s overall growth.
Malaysia, Saudi Arabia, the United Arab Emirates, Indonesia and Pakistan retained their positions as the world’s most developed Islamic finance markets, according to the report. Their performance was attributed to comprehensive regulatory frameworks, strong institutional development, active financial markets and established systems for education and knowledge development.
Several other countries also recorded notable improvements in Islamic finance development, including Türkiye, Tanzania, Kenya, Benin, Azerbaijan and Uzbekistan. The gains point to expanding activity across both established markets and countries seeking to develop their Islamic finance sectors.
The report identified regulatory reform and stronger financial market infrastructure as important factors supporting expansion beyond the industry’s traditional centres, particularly in Africa and Central Asia. These developments are helping create conditions for wider adoption of Islamic financial products across emerging economies.
Sustainability is also becoming a greater priority, with guidelines increasingly incorporated into the industry’s development. However, sustainability-related activity remains concentrated in more developed markets, indicating an uneven pace of adoption across countries.
Digitalisation is another significant trend shaping the sector. Financial technology, open banking and tokenised sukuk are influencing how financial products are accessed, issued and settled. According to the report, these developments are widening access to financial services while changing the processes through which Islamic financial instruments are delivered to markets.
Despite the industry’s expansion, the report identified a shortage of specialist talent development relative to the pace of growth. It highlighted the need for stronger specialist education to support the sector’s continued development and the increasing complexity of its financial products and infrastructure.
Khalid Khalafalla, ICD’s acting chief executive, said the developments reinforced the importance of using Islamic finance to support inclusive and sustainable economic transformation.
“For ICD, these developments reinforce the importance of ensuring that Islamic finance serves as a practical instrument for inclusive and sustainable economic transformation,” Khalafalla said. He added that the organisation remained committed to advancing private-sector development in its member countries through targeted financing and the promotion of Islamic financial solutions.
Mustafa Adil, LSEG’s head of Islamic finance, said the industry’s assets were expected to exceed US$10.5 trillion by 2030, supported by continued growth in Islamic banking, rising sukuk issuance, adoption in emerging markets and demand for sustainable and digital financial solutions.
The report’s findings are based on the Islamic Finance Development Indicator (IFDI), a benchmark assessing the development of the industry across 140 countries. It evaluates five areas: financial performance, governance, sustainability, awareness and knowledge, providing a framework for measuring progress in alignment with Islamic principles and identifying opportunities for further growth and reform.
