Global Islamic finance assets are projected to surpass $10.5 trillion by 2030, up from $6.5 trillion in 2025, as expanding banking services, record sukuk issuance and growing adoption across emerging markets reshape the industry, according to a new report by the London Stock Exchange Group (LSEG) and the Islamic Corporation for the Development of the Private Sector (ICD).
The industry grew by 9 per cent year-on-year in 2025, supported by stronger Islamic banking activity, improved financial market infrastructure, robust Islamic fund performance and new regulatory frameworks.
The findings, released at the Kuala Lumpur Islamic Finance Forum in Malaysia, point to increasing opportunities for African economies, with Kenya and Tanzania among the markets recording notable improvements in Islamic finance development.
The report highlights the growing role of regulatory reforms and stronger market infrastructure in expanding Islamic finance beyond established centres in the Middle East and Asia, particularly across Africa and Central Asia.
For African economies seeking alternative sources of long-term capital, the expansion presents opportunities to finance infrastructure, support small and medium-sized enterprises and broaden access to financial services through Sharia-compliant investment products.
Islamic finance operates under principles that prohibit interest-based lending and emphasise asset-backed financing, risk-sharing and ethical investment. Its instruments, including sukuk, or Islamic bonds, can provide governments and businesses with additional options for mobilising capital.
Khalid Khalafalla, Acting Chief Executive Officer of ICD, said the industry’s development reinforced the importance of using Islamic finance to promote inclusive and sustainable economic transformation.
“ICD remains committed to advancing private-sector development across its member countries through targeted financing and the promotion of Islamic financial solutions,” he said.
ICD is the private-sector arm of the Islamic Development Bank Group, supporting private-sector growth across its member countries.
Mustafa Adil, Head of Islamic Finance at LSEG, said continued expansion in Islamic banking, growing sukuk issuance, adoption in emerging markets and demand for sustainable and digital financial products would support the industry’s projected growth.
The report identified Malaysia, Saudi Arabia, the United Arab Emirates, Indonesia and Pakistan as the world’s most developed Islamic finance markets, citing their comprehensive regulatory frameworks, established institutions, active financial markets and strong knowledge ecosystems.
However, the findings suggest that opportunities are expanding beyond these established markets as governments introduce reforms to attract Islamic investment and develop domestic financial systems.
Kenya and Tanzania’s improved performance highlights the potential for East Africa to strengthen its position in the sector. Further progress will depend on regulatory clarity, investor awareness, market development and the availability of skilled professionals.
Digitalisation is also emerging as a key driver of growth. Financial technology, open banking and tokenised sukuk are changing how Islamic financial products are distributed, issued and settled, potentially widening access to financing.
Sustainability is gaining prominence, with more attention being paid to guidelines that align Islamic finance with responsible investment. However, the report notes that sustainability-related activity remains concentrated in more developed markets.
A shortage of specialised talent remains another challenge, underscoring the need for stronger professional training and education as the industry expands.
The report draws on the Islamic Finance Development Indicator, which assesses the sector across 140 countries using five measures: financial performance, governance, sustainability, awareness and knowledge.
With assets forecast to exceed $10.5 trillion by 2030, the industry’s next phase will depend on whether emerging markets, including those in Africa, can translate growing interest into stronger institutions, deeper capital markets and wider access to investment.
