Impact investing will boost global Islamic finance

Subject

Impact investing and Islamic finance.

Significance

The share of Islamic financial assets remains limited, currently accounting for just 1.27% of global financial assets, according to the latest Zawya Thomson Reuters report on the 'State of the Islamic Economy'. However, new opportunities are ahead. Impact investing, defined by its ambition of achieving the dual goals of measurable positive social and environmental impact, and financial return, is a rapidly growing segment of international financial markets. It offers unique opportunities for Islamic investors looking for investment choices that meet the goals of an Islamic value-based investment approach.

Impacts

• Impact investing will create impetus for further product development in the Islamic finance sector.
• New deals are in the pipeline after record innovation in 2015 in social-impact bonds that are compliant with Islamic financial principles.
• They will increase the attractiveness of the Islamic finance sector to a whole range of investors.