London: Islamic finance, once a niche market, has expanded into a significant financial sector with assets surpassing USD 5 trillion across more than 80 countries. However, a recent report by Standard Chartered reveals that a lack of understanding about Islamic banking principles and practices is hindering corporate engagement, with 65% of interested corporates lacking prior exposure.

The report, titled 'Islamic Banking for Corporates: Broadening Horizons,' highlights a substantial opportunity for corporates to access the growing USD 5.5 trillion Islamic finance market, projected to reach USD 7.5 trillion by 2028. Despite the doubling of corporate Sukuk issuers since 2020 and a 38% increase in issuance volumes, many corporates remain uninformed about available Shariah-compliant solutions.

Khurram Hilal, CEO of Group Islamic Banking at Standard Chartered, emphasized the potential benefits for corporates that embrace Islamic finance, including access to specialized capital pools, preferential pricing, government incentives, and ESG-focused investments. The existing knowledge gap represents a significant opportunity cost.

The report also notes the alignment between Islamic finance principles and ESG frameworks, with a notable demand for sustainable Sukuk, which were oversubscribed by an average of 4.3 times their issuance value in 2024. Digital innovations, such as tokenized Sukuk and AI-enabled Shariah-compliance tools, are poised to further transform the sector.

Islamic banking's strategic role in emerging markets is underscored by its increasing relevance in critical trade corridors, particularly across the GCC, Southeast Asia, South Asia, and Africa. The Halal economy alone constitutes a USD 2.2 trillion market opportunity, with corporates leveraging Islamic finance solutions through initiatives like Standard Chartered Saadiq's Halal360.

As the only international bank with a global Islamic banking franchise, Standard Chartered has facilitated over USD 200 billion in Islamic financing. Khurram Hilal reiterated the bank's commitment to bridging the gap between corporate interest and expertise, aiding global corporates in deploying Shariah-compliant banking solutions.

The full report is accessible on Standard Chartered's website, providing further insights into the evolving landscape of Islamic finance.