The Road to the SDGs

Guidelines for the IFS, the policy will serve as a reference document on prioritising IsDB’s activities in the sector. X The policy's objectives include: – Development of enabling legal, governance and regulatory environments – Building capacity and technical expertise – Establishing strategic partnerships – Supporting Islamic financial institutions and products. POTENTIAL IMPACTS X The policy will apply to all IsDB fully or partially financed projects, interventions, programmes and initiatives relating to the Islamic finance sector. X Projects will be sourced and prioritised based on how well they align to the strategic objectives and underlying goals set out by the policy document. X Effective implementation of the policy will strengthen the IFS in MCs, allowing it to better compete with conventional finance in terms of the quality products, institutions and services, thereby catalysing growth and development of their respective real sectors. Overall, it is expected that the market penetration and market share of Islamic finance will grow as a result. INVESTMENT X As of year-end 2017, Shariah- compliant/ Islamic finance industry assets stood at an estimated US$ 2 trillion, much of which originating from MCs where Islamic banking asset growth outstrips conventional asset growth. X IFS assets account for a mere 2% of global financial assets while only 14% of the nearly 2 billion Muslim population is estimated to have access to finance. X In 11 MCs, Islamic finance is systemically important, such that its failure could lead to financial crisis and recession. X MCs in the Gulf region, MENA (excluding GCC) and Asia have the largest share of the global Islamic finance market. I S L A M I C F I N A N C I A L S E C T O R A S S E T S IFS assets account for a mere 2% of global financial assets while only 14% of the nearly 2 billion Muslim population is estimated to have access to finance [ 75 ] T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S