Bahrain No 1 in MENA

Bahrain has emerged as a significant leader in Islamic Finance development in the MENA region by dominating the IFDI rankings for the seventh consecutive year in a row. 

The annual Islamic Finance Development Indicator (IFDI), which measures the overall development of the Islamic Finance industry, also placed Bahrain second globally. The report,  the seventh and latest, released yesterday at the Indonesia Sharia Economic Festival in Jakarta was launched by the Islamic Corporation for the Development of the Private Sector (ICD) and financial market data provider Refinitiv.

Powering Bahrain to the top, the report said, were its robust and supportive Islamic finance and banking regulations as well as increases in both the number of Islamic banking assets and the number of institutions offering Islamic finance. Bahrain leads MENA in all seven IFDIs to date, despite a global slowing of growth in the Islamic banking sector.

“Bahrain has strong governance and regulatory framework, with a high level of Shariah governance, strong corporate social responsibility activities and disclosures by Islamic banks, and strong overall financial disclosures,” the report reads.  The report, however, also warns that Bahrain’s Islamic banks face “relatively high risks from waste management, workplace health & safety and emissions to water due to higher exposure to the manufacturing, construction and healthcare sectors.”

Bahrain’s overall risk exposure, as per the report, compared with other Islamic banking markets is moderate. The IFDI provides an annual rank for each economy in the global Islamic finance industry. It aggregates scores across five component areas – quantitative development, knowledge, governance, corporate social responsibility, and awareness – for the 131 countries where Islamic finance has a presence.