UAE Bolsters Global Dominance in Islamic Banking and Halal Sector
A Fresh Spin:
The United Arab Emirates (UAE) is making a major push to solidify its status as a dominating force in the Islamic finance arena and the global halal industry. In May, the UAE unveiled a wide-reaching strategy to spark innovation, stimulate economic diversity, and boost international competitiveness across Islamic banking, Takaful (Islamic insurance), Sukuk (Islamic bonds), and non-banking services - all anchored in global standards and modern infrastructure.
This strategic move comes as Islamic banking shows no signs of slowing down. As of February 2025, it accounts for a whopping 18% of the UAE’s banking assets and nearly a quarter (22.8%) of the country's credit. By the end of 2024, Islamic banks in the UAE dished out a whopping AED503.5 billion in total credit, marking a 16% year-on-year rise, and deposits soared by 16.9% to a staggering AED595.3 billion.
The Islamic Sukuk sector is also showing rapid growth. The launch of dirham-denominated Islamic Treasury Sukuk (T-Sukuk) in 2023 was a momentous milestone, placing the UAE among the world's top Sukuk listing centers. As it stands, Nasdaq Dubai hosts over $95.7 billion in listed Sukuk.
Thanks to the government's strategic investments and a commitment to progressive regulation, the UAE ranks fourth globally in Islamic finance markets by total assets, as reported by the Islamic Finance Development Indicator in 2023.
This aggressive expansion doesn't stop at finance. The UAE is also growing its halal sector and aiming to grow exports from AED74 billion to AED315 billion by 2031. Local manufacturers are increasingly capitalizing on the growing market demand for halal-certified goods.
Saleh Lootah, Chairman of the UAE Food and Beverage Manufacturers Group, sees the strategy as a game-changer for the UAE's position as a global hub for halal production. He cites the country's logistics advantages and world-class infrastructure as key factors in this growth.
In essence, the UAE is making a big bet on Sharia-compliant financial services and halal commerce, with the ultimate goal of cementing the nation's status as a global leader in these fields that are essential for economic diversification and sustainability. Reports indicate that the government is pumping significant resources into modern regulatory frameworks, financial infrastructure, and innovation to ensure the long-term success of these efforts.
- The UAE is investing heavily in innovation for the development of Sharia-compliant financial services, such as Islamic banking, Takaful, Sukuk, and non-banking services, to boost its dominance in the Islamic finance arena and global halal industry.
- Islamic banking, which accounts for 18% of the UAE’s banking assets and nearly a quarter of the country's credit, is witnessing rapid growth, with Islamic banks in the UAE dishing out a total credit of AED503.5 billion in 2024, marking a 16% year-on-year rise.
- The launch of dirham-denominated Islamic Treasury Sukuk (T-Sukuk) in 2023 represented a significant step in the growth of the Islamic Sukuk sector, making the UAE a major player in Sukuk listing centers globally.
- Beyond finance, the UAE is also focusing on growing its halal sector, with a goal of increasing export revenue from AED74 billion to AED315 billion by 2031. This growth is driven by local manufacturers capitalizing on the growing demand for halal-certified goods.
