Report: Islamic Finance Beyond the OIC - Developing New Hubs
Islamic Finance Gateway
Financial centers outside the OIC countries have had success introducing Islamic finance, both to serve resident and foreign Muslim investors as well as to profitably direct capital to growing markets in the Middle East, South and Southeast Asia. While the UK is currently a leader in this space, with around US$7 billion in Islamic finance assets, in light of Brexit negotiations, investors and sukuk issuers are looking to Luxembourg as an attractive center with access to European markets. South Africa is a relatively smaller Islamic finance market, but it holds great potential because of the reach of its financial industry to the large Muslim populations of Southern and East Africa.
The growing appetite for Islamic products is apparent in Russia, as well as the experience of Russian financial professionals. Regulators are studying measures to develop a regulatory framework that would recognize full-fledged Islamic banks to prompt robust industry development. In a promising development, the IDB Group has partnered with the Russian government, Bank of Russia, and some of the largest state banks to launch Islamic finance development initiatives. Stakeholders hope these activities could help in building the professional skills and political relationships that could lead to a stronger industry ecosystem.