- Islamic banking sector is expected to reach a 30% market share by 2026, with assets growing at an average rate of 25-28% annually
Pakistan’s contribution to the global Islamic banking market is significant. The country’s Islamic finance ecosystem includes Islamic banking institutions, sukuk (Islamic bonds), and takaful (Islamic insurance).
Pakistan’s Islamic banking sector is expected to continue growing, driven by government initiatives and increasing demand for Shariah-compliant financial products. Islamic banking sector is expected to reach a 30% market share by 2026, with assets growing at an average rate of 25-28% annually.
This growth is driven by a predominantly Muslim population, modest financial inclusion, and government support. Islamic banking assets have reached $40.7 billion in March 2025, accounting for approximately 21.1% of the country’s total banking sector assets. This growth is driven by regulatory support, public demand, and the government’s goal to transition to a fully Shariah-compliant financial system by 2027.
Key Statistics:
– Islamic Banking Assets: $40.7 billion (March 2025)
– Market Share: 30% of Pakistan’s banking sector assets
– Deposits: $29.5 billion (25.4% of total deposits)
– Branches: Over 8,000 Islamic banking branches across Pakistan
The sector’s growth is also driven by increasing digitalization and the adoption of Islamic fintech. Pakistan’s Islamic fintech sector is gaining momentum, driven by increasing digitization and government support. Key trends include:
Digital Islamic Banking: Mobile banking and online platforms offering Shariah-compliant services. Pakistan’s first digital Islamic banking platform, Aik by BankIslami, has partnered with the State Bank of Pakistan to boost rural financial access.
Islamic Payment Systems: Digital payment solutions, such as SadaPay and PaisaBox, providing halal payment options
Fintech Startups: Companies like Finja and Zeel offering innovative Islamic finance solutions
Blockchain and Cryptocurrencies: Exploration of blockchain technology for Islamic finance and Shariah-compliant cryptocurrencies
Regulatory Support: The government is working to create a conducive environment, with plans to incorporate Shariah principles into fintech advancements, including smart contracts and blockchain technology.
Growing Ecosystem: Pakistan hosts 19 Islamic fintech firms, focusing on digital wallets, SME financing, and wealth management.
Investment and Partnerships: Fasset, an American digital banking platform, has partnered with Habib Rafiq Limited to revolutionize digital investment and financial inclusion in Pakistan.
Market Potential: The Islamic fintech sector in Pakistan projected in 2025 to reach $2.8 billion.
These developments are expected to drive growth in Pakistan’s Islamic finance sector, increasing access to Shariah-compliant financial services. Islamic fintech is making significant strides, especially in Pakistan, where it’s seen as a way to increase financial inclusion and provide Shariah-compliant services to the masses. These developments are expected to enhance financial inclusion, provide innovative solutions, and promote economic growth.
The State Bank of Pakistan has also launched initiatives to promote Islamic fintech including:
– Islamic Fintech Sandbox: A regulatory sandbox for testing Islamic fintech solutions.
– Digital Financial Inclusion: Initiatives to increase financial inclusion and promote digital payments.