Growthprospects and development priorities of economies in the region are uniquelydiverse. The common theme that shows up in Asia’s emerging economies is thedemand for quality infrastructure such as transportation, energy networks andcommunication to foster sustained economic growth, improve public healthsystems, and reduce poverty. Despite rapid economic growth and increasedprosperity across the region in recent years, widespread poverty anddevelopment challenges such as income gaps, human development,industrialization and expansion of infrastructure still remain part of theagenda for the developing Asian economies. These also needs bring forth variousopportunities for Islamic finance to tap.
Asia’seconomic growth is outshining other parts of the world, and the region is setto remain the largest contributor to global growth. According to theInternational Monetary Fund (IMF), regional output is projected to grow 5.6%and 5.
5% in 2017 and 2018 respectively, underpinned by strong consumption andinvestment. Againstthe backdrop of Asia’s continued economic growth, there are numerous factorsthat will support the growth of Islamic finance in the region. Asia is thelargest and most populous continent in the world, housing roughly 60% of theworld’s current population1.Asia’s favourable demographics, with its growing affluent middle class andlarge young population, has created a new generation of consumers. Coupled withthe fact that Asian households have one of the highest savings rates in theworld, there is tremendous opportunity to bring Shariah compliant financialservices to over 4.4 billion people living in the region.
In addition, Islamicfinance promotes financial inclusion by offering vehicles for savings,financing, and insurance to large Muslim populations, particularly the poor andvulnerable in rural areas. According to World Bank’s 2014 Global Findex data,only 46% of adults have an account in South Asia, while in East Asia &Pacific, the percentage is higher at 69% of adults having an account.1 United Nations Population Prospects2017