Islamic finance offers a USD 5.5 trillion opportunity to unlock new markets and capital

Islamic banking has evolved from a niche offering to a mainstream financial segment, spanning more than 80 countries and assets exceeding USD 5 trillion. Yet, ambiguities around what it is – its principles, structures, and market dynamics – pose challenges for corporate leaders seeking to engage with or invest in this space, with 65 per cent of corporates indicating interest in Shariah-compliant solutions had no prior background, or exposure to Islamic banking.

‘Islamic Banking for Corporates: Broadening Horizons’, a report by Standard Chartered published today, identifies a lack of product familiarity as a key factor restricting corporates from accessing USD 5.5 trillion in global Islamic finance assets, which is projected to reach USD 7.5 trillion by 2028. The number of corporate Sukuk issuers has nearly doubled since 2020, driving a 38 per cent increase in issuance volumes to USD 58.8 billion in 2024.

“Islamic banking has evolved into one of the world’s fastest-growing sources of capital, but awareness amongst corporates has not kept pace,” said Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered. “Corporates that build Islamic finance capabilities stand to access specialised capital pools with trillions in assets, preferential pricing in oversubscribed markets, government incentives in high-growth markets, and ESG-focused capital pools where ethical screening is structurally embedded. This knowledge gap reflects an increasingly expensive opportunity cost.”

Sustainability and AI driving momentum

Islamic finance principles align closely with ESG frameworks, both prioritising transparency, fairness, ethical conduct and environmental responsibility. Sustainable Sukuk were oversubscribed by an average of 4.3 times their issuance value in 2024, compared to 3.1 times for regular Sukuk, reflecting heightened investor demand for instruments that meet both Shariah and sustainability criteria.
Digital innovation is further accelerating this momentum. Tokenised Sukuk, blockchain-based settlements, and AI-enabled Shariah-compliance tools are set to transform how capital is raised and managed, while reducing issuance costs and improving cross-border governance.

Gateway to high-growth emerging markets

Islamic banking provides strategic access to critical trade corridors and economies where Shariah-compliant finance is increasingly expected or mandated, particularly across the GCC, Southeast Asia, South Asia, and Africa. Shariah-compliant finance underpins much of the USD 5.7 trillion South-South Corridor connecting these regions, which now accounts for nearly a quarter of global trade. This has become increasingly relevant amid shifting trade and investment corridors.

The Halal economy alone represents a USD 2.2 trillion market opportunity. Corporates operating across Muslim-majority markets are increasingly leveraging Islamic trade finance and supply chain solutions through initiatives such as Standard Chartered Saadiq’s Halal360, and the expanding Islamic trade finance networks.

Standard Chartered is the only international bank with a global Islamic banking franchise, serving clients across more than 30 markets through Standard Chartered Saadiq. The bank has arranged over USD 200 billion in Islamic financing, spanning Sukuk, structured trade and sustainable-finance solutions.