IslamicFinance.de

The first consumer sentiment survey conducted by Boston Consulting Group has found that GCC residents hold higher levels of financial optimism than their contemporaries around the world. Only in the UAE and Oman does the optimism level dip below 90%. Meanwhile, the optimism in Bahrain is as high as 96%. The respondents also reported stricter savings habits than international counterparts such as those in the US and Japan. Results from the survey suggest a potential boon to the food & beverage, non-luxury fashion, educational services, and out-of-home entertainment segments. Taken together, these factors represent a significant opportunity for expansion-minded companies. The survey also points to two other fertile conditions; exceptionally high internet penetration rates and a fledgling ecommerce culture.

In a recent EY study, titled ‘World Islamic Banking Competitiveness Report 2016’, the firm explores the Islamic Banking landscape. The report is built up from an analysis of 69 participation banks (Islamic Banks) and 45 conventional banks, covering the markets of Bahrain, Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey, Kuwait and Pakistan. The report finds that the markets covered contain 93% of international participant banking industry assets, valued in excess of $920 billion in 2015. The largest part of that value stood in GCC (Gulf Cooperation Council) countries, at $606 billion, followed by ASEAN countries at around $159 billion. The increase in asset value has been impressive between 2010 and 2014, growing with a CAGR of 16%.

Africa is expected to see a massive population boom, many of whom will grow up Islamic. As such, demand for Islamic products and services on the continent are expected to rise in the coming years. Financing projects through Islamic financial instruments has massive potential within the African region. One such instrument is sukuk. This is beneficial to projects that require long term financing. These opportunities are not only for delivering Sharia-compliant goods and services to the Muslim population. Even in countries with a low proportion of Muslims, the values and principles of Islamic financing—such as investment products that avoid alcohol or gambling, and no-interest lending—appeal to investors seeking ethical schemes or banking customers seeking alternative products.