Islamic finance, based on Shariah principles, is growing globally, projected to hit US$7.5 trillion by 2028. In Singapore, assets reached US$27.4 billion by 2024, driven by Shariah-compliant fintech and sustainable finance initiatives.
Global Expansion of Islamic Finance
Islamic finance, guided by Shariah principles that forbid interest and promote risk-sharing, is a significant part of the global financial system. By the end of 2024, it’s expected to manage assets over US$5.5 trillion, with projections reaching US$7.5 trillion by 2028. While it’s predominantly present in Muslim-majority countries, international hubs like Singapore are increasingly influential in facilitating cross-border Islamic capital flows.
Singapore’s Role in Islamic Finance
By 2024, Singapore managed approximately US$27.4 billion in Islamic finance assets. This growth is bolstered by innovations like the Lion-BIBDS Islamic Enhanced Liquidity Fund and the rise of Shariah-compliant fintech solutions such as Kapital Boost. Ranked 4th globally in the Global Financial Centres Index (GFCI 37) in early 2025, Singapore demonstrates strong financial infrastructure, with notable deals like Maybank’s RM2.5 billion (US$540 million) Islamic financing for a Southeast Asian data center in 2025.
Advancements in Fintech and Sustainable Finance
Islamic fintech in Singapore is set to hit US$179 billion in transaction volume by 2026, driven by platforms supporting halal-compliant SME financing. The country’s thriving digital finance ecosystem encourages Shariah-compliant innovations in payments, lending, and investments. In early 2024, sustainable sukuk issuance reached a record US$13.4 billion, reflecting Singapore’s commitment to ethical finance, supported by initiatives like the Sustainable Bond Grant Scheme, which blend ESG and Islamic values.
Islamic Finance in Singapore: Unlocking Growth Potential in a Strategic Financial Hub
Singapore, renowned for its strategic location and robust financial infrastructure, is increasingly embracing Islamic finance as a key growth lever. With its diverse economy and progressive regulations, the city-state offers a conducive environment for Islamic financial products, catering to both Muslim and non-Muslim investors. This integration aligns with Singapore’s ambition to be a global financial center, tapping into the trillion-dollar Islamic finance market and attracting investments from neighboring nations with significant Muslim populations.
The Monetary Authority of Singapore (MAS) plays a pivotal role by crafting adaptive policies that support Shariah-compliant financial services. By fostering partnerships and innovation, Singapore aims to enhance its competitiveness. The growth of Islamic finance here not only diversifies financial offerings but also strengthens Singapore’s role as a comprehensive financial hub, promoting inclusivity and sustainable growth.
| This article was first published by ASEAN Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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