A summary of the latest Islamic finance news from around the world.
Islamic fintech market slated to reach $128 bn by 2025
The Islamic fintech market size for the Organisation of Islamic Council (OIC) countries is forecast to grow at 21% CAGR to reach $128 billion by 2025, according to research cited by Financial Reporter. Based on DinarStandard and Elipses figures, the Islamic fintech market size in OIC was $49 billion in 2020. “While this might seem like a standout figure, the reality is that this accounted for only 0.72% of the global fintech market size,” wrote Khofiz Shakhidi of Alif Bank. The article noted that the Islamic fintech sector is facing challenges around market awareness and knowledge about Sharia-compliant products and services. “This is an issue commonly raised in non-Muslim jurisdictions, and the UK is no exception,” the article noted. According to the ICD-Refinitiv Islamic Finance Development Report, in 2019, the UK had the third-largest number of Islamic Finance Education Providers, followed by Indonesia and Malaysia. The UK ranked third in the world for the number of Islamic Finance Conferences held in 2019. There are estimated to be more than 100,000 Islamic finance retail customers in the UK, with the value of net assets of Islamic funds at £600 million ($813 m).
Saudi Arabia’s Khwarizmi Ventures gets $70 m in funding for MENA and Pakistan start-ups
Khwarizmi Ventures raised $70 million in its second round to support early-stage start-ups in the MENA and Pakistan region, Arab News reported. Announced at the LEAP 2022 tech conference in Riyadh, the fund has invested in 25 companies in eight areas in eight different countries. “Through the additional funding, we aspire to enable the region’s leading startups to reach their highest potential, while continuing to support our existing businesses with affiliate investments to support their growth journey,” Said Abdulaziz Al-Turki, managing partner. In October 2021, the venture fund secured SR237 million ($63.2 m).
Islamic Development Bank Institute releases book to curb risks in Islamic finance
The Islamic Development Bank Institute (IsDBI) has released a new book, "Heavy Tails and Coherent Risk Measures in Islamic Finance.” The book “provides a hands-on introduction to the topic, covering the concepts behind“heavy tails” and coherent risk measures along with practical examples on how to apply the relevant techniques,” MENAFN reported. Authored by Dr. Mahmoud Bekri, a Research Economist at IsDBI, it is divided into four parts on “the fundamental ideas and methods related to heavy tail distributions, as well as to familiarise them with advanced tools that use the heavy tail distributions.” The first part discusses the sources, main principles and guidelines of Islamic finance, while the second part covers four main topics comprising of probability theory, time series modelling, heavy tail and stable distributions and the dependence structures, the report noted. The third part “focuses on the implementation of the advanced methods in risk management, placing great emphasis on market risk. The final part covers portfolio selection and optimisation, and the portfolio performance measurement.” Bekri said that “the significance of the book is that it does not only emphasise the importance of concepts like heavy tail and coherent risk measures and theoretically introduce them, but it also shows the practical side of using them by providing practical examples.”
Abu Dhabi Islamic Bank’s UK arm finances Sainsbury’s deal
Abu Dhabi Islamic Bank’s (ADIB) UK branch has provided AED100 million ($27 million) structured financing of a Sainsbury’s supermarket in Edinburgh, Scotland, Arabian Business reported. Supported by Urbium Capital Partners, the property is a food store and petrol station on a 25-year lease. It is the fourth UK supermarket investment transaction ADIB has been involved in over the past year. ADIB closed over AED1 billion ($272.2 m) in major financing transactions in 2021, including AED260 million ($70.7 m) for a major Saudi Arabian investor to buy the headquarters of accounting consultancy PWC in Belfast, Northern Ireland, Arabian Business reported.
Malaysia’s Bank Negara launches Financial Sector Blueprint 2022-2026
Malaysia’s five-year Financial Sector Blueprint was unveiled at the launch of MyFintech Week 2022 (MyFW 2022) in Kuala Lumpur by the country’s central bank, Bank Negara. The Blueprint, covering 2022-2026, outlines the vision and strategies for the development of Malaysia’s financial sector. Five strategic initiatives form the core aims: fund Malaysia’s economic transformation; elevate the financial well-being of households and businesses; advance digitalisation of the financial sector; position the financial system to facilitate an orderly transition to greener economy; and advance value-based finance through Islamic finance leadership. MyFW 2022 is focusing on seven key priorities for the financial sector: New Realities, Economy, Inclusion and Financial Health, Startups, Regulations, Sustainability and Resiliency.
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