As digital transformations accelerate across the Islamic finance ecosystems worldwide, the Global Islamic Fintech Report 2021 presents groundbreaking insights on the booming Islamic Fintech landscape that has identified 241 Fintechs globally.
The Report presents an estimated market sizing of transaction volume, a country level benchmarking index of 64 countries, industry views, and an analysis of gaps and opportunities across key sub-categories and geographies for government policy makers, Islamic Fintechs, and investors in this space.
The Report estimates the 2020 Islamic Fintech transaction volume within OIC* countries to be $49 billion. While this represents 0.7% of global Fintech transaction volume, Islamic Fintechs are projected to grow to $128 billion by 2025 at 21% CAGR. This is a higher growth projection compared to conventional Fintechs projected at 15% CAGR for the same period.
Saudi Arabia, Iran, UAE, Malaysia and Indonesia are the largest with estimated transaction volume.
Meanwhile, the GIFT Index of 64 countries, ranks Malaysia, Saudi Arabia, UAE, Indonesia and UK as the top 5 strongest ecosystems. It is a composite index of 32 indicators covering 5 categories: Islamic Fintech market & ecosystem, talent, regulation, infrastructure & capital. Our opportunity analysis shows that besides the top 5 strongest ecosystems, Kuwait, Pakistan, Qatar, Bahrain, and Jordan are fast maturing ecosystems.
The Report also gathered inputs from the industry in the form of a global survey of Islamic Fintechs. From the 100 survey respondents 56% of Islamic Fintechs expect to raise an equity funding round in 2021 with an average round size of USD 5.0M. This shows the continuing confidence in the growing ecosystem. The respondents also highlighted the greatest hurdles to be
Lack of Capital, Consumer Education, and Finding Talent. Meanwhile, the respondents considered Payments, Deposits & Lending and Raising Funds as the top growth segments in 2021.
We are also grateful to have special contributions by industry leaders who represent industry, regulation, Shariah compliance and investor views.
One of the key area of insights for investors and Fintech players are the areas of Islamic Fintech categories and geographies that are underdeveloped. Payments, Deposits & Lending, and Raising Funds categories are relatively crowded segments, but continue to display high momentum, and represent low hanging fruit for investors. Regionally, Sub-Saharan Africa, MENA (ex-GCC) have gaps across the 9 iFintech services segments.