Indonesia Seen Among Top Targets For Shariah Finance
Indonesia and Muslim countries in Central Asia are seen as the next growth areas for Islamic finance as hopes of expansion into Western markets fade and Gulf Arab markets remain fragmented.
Islamic banks are struggling to expand within the Gulf Arab region, where shareholder sensitivities, a lack of transparency and conflicting national interests have limited growth in the sector. Banks have eyed Muslim minorities in Western countries such as France and the United Kingdom but without proper regulatory support these markets will take time to penetrate.
“For many years it [Islamic finance] has been viewed as an area with potential but realizing that potential is a lot more challenging than institutions realized,” said Frederick Stonehouse, head of strategic mergers and acquisitions at Bahrain’s Unicorn Investment Bank, at the Reuters Islamic Banking and Finance Summit in Bahrain.