The head of the Islamic Development Bank (IsDB) Group stated on Tuesday that Islamic finance offers a reliable financing option with its asset-based approach that mitigates risks.
The Islamic Development Bank is a multilateral development finance institution that is focused on Islamic finance for infrastructure development and located in Jeddah, Saudi Arabia. There are 57 shareholding member states with the largest single shareholder being Saudi Arabia.
Mohammad Al Jasser, speaking at the bank’s annual meeting in the Saudi capital Riyadh, predicted that the Islamic banking sector would be worth $5 trillion by 2025. The Islamic finance industry has been has seen remarkable growth in recent years, expanding in size, liquidity, and sophistication, he said.
Sukuk is one of the fastest-growing asset classes within the Islamic finance industry, he stated.
Sukuk is an Islamic financial certificate, comparable to a bond in Western banking, that abides by Islamic religious law.
The sukuk market grew by 9.8% last year, reaching $823 billion, he said, adding that as a prominent player in the industry, the Islamic Development Bank sees enormous potential and is utilizing Islamic finance tools to accelerate growth.
“Unlocking the power of sukuk markets can significantly fuel infrastructure and climate finance initiatives,” he added.
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