Manama, Kingdom of Bahrain: This year, once again keeping the tradition alive, Cambridge Institute of Islamic Finance launched the 13th edition of the highly acclaimed Cambridge Global Islamic Finance Report (Cambridge GIFR), the oldest yearbook in Islamic banking and finance, in Bahrain. Cambridge GIFR 2022 was launched by His Excellency Sheikh Ebrahim bin Khalifa Al Khalifa, Chairman of Board of Trustee of AAOIFI at the 17th Annual AAOIFI-IsDB Conference on Islamic banking and finance.

Cambridge GIFR is a valuable resource for Islamic financial intelligence and the most influential and respected annual report in Islamic finance globally. Cambridge GIFR has the unique recognition of being the first report to have documented the size and growth of the global Islamic financial services industry since its inaugural edition in 2010.

Each year, the report has a central theme that revolves around a specific trend or future prospect such as; Regulations, social finance, leadership, human resource development, artificial intelligence, socio-economic inclusion, & halal industry. This year the report has taken a futurist stance on the industry of Islamic finance, encouraging researchers, practitioners and professionals to predict the possible trends that could shape the industry moving forward. This theme is in a way an extension of the last year’s theme on Islamic finance in a post-COVID world.

One major contribution of the Cambridge Global Islamic Finance Report is the size and growth of the industry. In 2010, Cambridge GIFR gave an accurate estimate of the Islamic finance industry for the first time. The global Islamic financial services industry nearly touched the historical milestone of US$3 trillion at the end of 2020. The estimated Islamic financial AUM as of December 31, 2021, was US$3.178 trillion, exhibiting an annual growth of 8.06%. An interesting fact to note is that in previous years, since 2012-2013 the industry was growing at a negative rate, however, since 2019 or during the COVID era, the industry showed a positive growth rate. This is a clear indication that the industry was not affected by the pandemic adversely.

“We have identified three trends in the global Islamic banking and finance industry; improvement in Shari’a governance framework, emphasis on Islamic social finance and increase in the use of technology,” commented Dr Humayon Dar, Founding Editor of Cambridge GIFR, during the launch ceremony.

The theme of the report is relevant in today’s world as the market is suggesting that the Islamic finance industry is lacking a distinct economic value proposition, which will have an adverse effect on the future of the industry. The focus of the industry has become very narrow emphasising on the Shari’a aspect only. The only way forward is to take a step back and revisit the basics, allocating a distinct definition to Interest-free terminology.

Another distinguishing feature of GIFR is the Islamic Finance Country Index (IFCI), which has been published annually in the report since 2011. IFCI, the oldest index for ranking different countries with respect to the state of IsBF and their leadership role in the industry on a national level and benchmarked to an international level, this year ranked 50 countries. This analysis indicates that the Islamic finance is highly concentrated in a few countries and others only contribute marginally to the global Islamic finance industry.

Saudi Arabia has emerged as the Number One Islamic financial market since the start of IFCI in 2011. This is primarily because of the pro-active role played by the Saudi Central Bank, which has for the last few years explicitly started not only recognising IsBF but has also taken measures to promote the industry. The Top 3 IFCI countries were not challenged by anyone of those below the ranking except lately when Indonesia captured the first position in 2019. Indonesia is now considered as a player with potential to lead the global Islamic financial services industry. Saudi Arabia and Malaysia have edged Indonesia because of the inherent strengths of their respective IsBF sectors.

The likes of Indonesia, Iran, Pakistan and Bangladesh (the countries with the larger Muslim populations) have started dominating the ranking. This must be used to infer that the future of IsBF is in the countries with large Muslim populations. There is no change in ranks of 11 countries (Iran, Pakistan, Sudan, UAE, Kuwait, Qatar, Oman, Jordan, Egypt, Tunisia and Lebanon) but apart from Iran, these countries have witnessed improvement in their score.

Cambridge GIFR 2022 is supported by Gatehouse Bank, Bank of Khartoum, Prudential BSN Takaful, with DDCAP Group as the strategic partner. Minhaj University Lahore has served as Special Knowledge Partner for the fourth consecutive year.

To obtain a copy of Cambridge GIFR 2022, or for further information please contact: gifr@cambridge-ifa.net

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Cambridge Institute of Islamic Finance – Cambridge-IIF – is an independent research centre, specialising in the financial sectors of the countries wherein Islamic banking and finance is a significant activity. Leveraging upon the academic resources the city of Cambridge has to offer, Cambridge-IIF is well-positioned to undertake research projects to study the global phenomenon of Islamic banking and finance. Cambridge-IIF aims at conducting policy-oriented research to further spur growth in Islamic banking and finance, with a special focus on the Sustainable Development Goals (SDGs).

Cambridge IFA is a financial services intelligence house that specialises in developing and utilising powerful cutting-edge analytical tools to evaluate business data, assess macroeconomic indicators and understand market trends, leadership positioning and brand development relevant to the development of the financial services industry globally.