Qatar's Islamic Finance Sector Set For Growth

(MENAFN- The Peninsula) Deepak John | The Peninsula

The year 2022 is positioned for growth for Qatar's Islamic finance institutions as the Economy expands in the run-up to the FIFA World Cup 2022. Qatar's Islamic finance sector is well placed to overcome any lingering challenges according to Oxford Business Group (OBG) report.

“Looking ahead, the eyes of the world are on Qatar as it gears up for the 2022 FIFA World Cup late in the year, and many businesses and individuals are exploring opportunities in the market. Qatar's Islamic banks, takaful (Islamic insurance) providers, sukuk (Islamic bond) issuers and sharia-compliant asset managers are confident that the year will see robust growth as economic recovery gathers pace,” the report said.

It further added that the year looks poised for further growth and development for Qatar's Islamic finance institutions as the economy expands in the run-up to the 2022 FIFA World Cup, dwhich was a major driver of financing and insurance over the last decade. While an ongoing concern is the economic fallout from pandemic-related limitations on business, with strong financials and a supportive government, Qatar's Islamic finance sector should be well placed to overcome any lingering challenges. Innovations in financial technology (fintech) will help in this regard by cutting costs and boosting efficiencies. 

Qatar has been praised for having one the world's best ecosystems for Islamic fintech: the 'Global Islamic Fintech Report' for 2021 showed Qatar ranking 10th out of 64 Islamic fintech markets in 2020, and the local market is expected to grow from a value of $849m in 2020 to $2.1bn in 2025. 

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Qatar's banking sector is set for expansion, facilitated by the post-pandemic recovery; a series of large-scale transport and energy infrastructure projects; and the 2022 FIFA World Cup, which is set to attract more than 1 million visitors.

Investment in fintech has positioned Qatar to be a leader in both the conventional and Islamic segments. This has been supported by an established and innovative start-up ecosystem, which benefits from an active network of accelerators, incubators, VC funds and angel investors; as well as a regulatory framework tailored to the specific needs of the tech community, said the OBG report.

The global research and advisory firm report noted that Qatar's banking sector has successfully navigated a range of external challenges in recent years. It has emerged from the COVID-19 pandemic in an advantageous position to leverage the resurgence in local and international demand for a variety of financing options. 
Consisting of commercial, Islamic, investment and development banks, the sector benefits from the country's onshore Qatar Financial Centre – which is governed by an independent legal and regulatory body – as well as a growing financial technology industry. 
The banking sector and the economy as a whole are set to benefit from expanding demand for Qatar's energy exports, which supports government revenue and lending opportunities, it added. Qatar's Islamic banking industry is one of the world's largest and most experienced, given than its first entity – Qatar Islamic Bank – was established in 1982. Four decades later, as business confidence and economic growth is returning after two years of slowdown, the sector stands ready for renewed expansion. It can build on the important role it played in response to the virus, when it supported many businesses and individuals navigating the economic
fallout.

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