An introduction to the Islamic finance industry and its key asset classes

With the COVID-19 pandemic likely to affect the global economy, investors around the world are looking for alternatives to traditional investment and banking products. Demand for Islamic financial products is expected to rise as more investors demand increased transparency and ethical decision making from their financial institutions. The attached paper provides an overview of these products and sheds light on the significance of Shari’ah-based Islamic finance as an ethical alternative investment opportunity.

Key Takeaways:

• With the global outbreak of COVID-19, investors are looking for safe investments with greater transparency and ethical functioning, making Shari’ah-compliant products a suitable choice
• The Islamic finance industry has also provided significant returns on investments in recent years, together with transparent distribution, and ensured prudent spending of wealth, making it an attractive investment destination amid the current market conditions
• Of the Islamic financial products, Sukuk and Islamic banking are expected to witness the most growth in the near future through innovative forms and structures such as green Sukuk used to finance environmental projects or sustainable development projects
• The Islamic finance industry is expected to grow rapidly in the coming years as fintech disruption and focus on ESG factors present new growth opportunities