Shariah compliant investment products, which avoid excessive uncertainty and prohibited sectors, are growing steadily and reaching new markets. Global Islamic finance assets grew by 14.9 per cent in 2025 to reach $5.2tn, according to the AlHuda Centre of Islamic Banking and Economics (CIBE), which forecasts that assets will climb to $6tn in 2026. Over a longer period, LSEG and the Islamic Corporation for the Development of the Private Sector project that assets will reach US$9.7 trillion by 2029, an average annual growth rate of 10%.
Sukuk, bond like certificates that represent ownership in an underlying asset, remain the main investment product behind this expansion. The global sukuk market passed US$1 trillion in outstanding value in 2024, with issuance of US$254.3 billion, up 11% year on year.
Other products are growing from a smaller base. The Islamic Financial Services Board recorded a 25.6% year on year rise in Islamic fund assets in 2025, though the segment made up only 1.6% of assets. Global takaful, or Islamic insurance, was estimated to be expanding by 15 -17% annually. Digital products are the fastest growing area, with Islamic fintech representing 3% of total assets and expanding through digital payments, Shariah compliant buy now pay later, embedded finance, and applications of AI and blockchain.
The industry is still concentrated in a few markets. Iran, Saudi Arabia and Malaysia together hold US$4.3 trillion, or 72% of global Islamic finance assets. Newer markets are emerging, however. Tanzania, Zambia and Kenya have entered the sukuk market, bringing Africa further into global issuance, and although sub Saharan Africa accounts for only 0.7% of global assets, it has grown quickly from a low base.
Despite this momentum, structural constraints remain. CIBE highlights persistent challenges, including insufficient market liquidity, a structural overreliance on traditional banking, and regulatory limitations in frontier regions. Without deeper and more liquid Islamic capital markets, banking led growth alone may not provide sufficient resilience for long term expansion. While quantitative forecasts vary in scale, major industry sources agree on the trajectory: sukuk, funds, takaful, and fintech are all expanding, and new regional players continue to join established financial centers.
