The global Islamic finance industry continues to demonstrate strong and sustained growth, firmly establishing itself as a significant pillar of the international financial system. According to the Islamic Financial Services Board (IFSB) Stability Report 2025, the sector experienced double-digit expansion across its major segments, including banking and takaful, with Islamic insurance assets rising by nearly 17 per cent in 2024.
The Islamic Finance Development Indicator (IFDI) Report 2025 — jointly issued by the London Stock Exchange Group (LSEG) and the Islamic Corporation for the Development of the Private Sector (ICD) — projects that global Islamic finance assets will reach $9.7 trillion by 2029, reflecting consistent global momentum.
Islamic banking remains the industry’s dominant component, constituting nearly 72pc of total global Islamic finance assets, with Iran, Saudi Arabia, and Malaysia collectively accounting for almost three-quarters of the global share. The sukuk market continues to grow steadily as well, crossing $1tr in outstanding value, while new issuances reached approximately $254 billion in 2024, marking an 11pc year-on-year increase.
These indicators reflect the rapid institutionalisation of Islamic finance —supported by stronger regulatory frameworks, broader geographical adoption (including in non-Muslim jurisdictions), the integration of fintech and environmental, social, and governance principles, and expanding global recognition of Islamic finance’s contribution to sustainable and inclusive economic development.
The future of Shariah-compliant finance will not be shaped in boardrooms alone; it will be built in classrooms and research centres
As the industry approaches its 50-year milestone — tracing back to the establishment of Dubai Islamic Bank in 1975 — it continues to expand rather than mature into stagnation. By 2024, Islamic finance had extended its presence to 140 countries, illustrating the sector’s transformation from a niche idea to a mainstream global financial discipline.
This worldwide expansion has naturally propelled Islamic finance into an important academic field. Universities, research centres, and policy institutes across the world are offering structured programs to develop talent for the growing industry.
Malaysia remains a global leader in Islamic finance education. The International Centre for Education in Islamic Finance (INCEIF) sets international standards through its MSc, MBA, and PhD programs, which are closely aligned with regulators and the financial sector. The International Islamic University Malaysia (IIUM) offers advanced degrees in Islamic banking, finance, and Shariah law, integrating jurisprudence with contemporary financial studies.
In the Middle East, Hamad Bin Khalifa University (HBKU) in Qatar provides interdisciplinary programmes combining Islamic finance, law, and public policy. In Europe, universities such as Durham University, Aston University, and the University of Dundee run specialised MSc degrees in Islamic finance and banking, often with strong industry partnerships.
Even non-Muslim countries now recognise Islamic finance as a critical component of ethical, sustainable, and alternative finance education.
These developments reflect a growing global trend: as the Islamic finance industry matures, educational ecosystems are evolving in parallel.
Research centres, think tanks, and executive education programmes are helping to bridge theory and practice, equipping professionals to apply Islamic principles in modern finance, fintech, and risk management.
Within this global context, Pakistan’s financial system is undergoing a profound and historic transformation. Following the Federal Shariat Court’s 2022 judgment mandating the elimination of riba (interest) from the economy — and the State Bank of Pakistan’s (SBP) commitment to a full transition by 2027 — the shift from conventional to Islamic banking has accelerated significantly.
According to SBP’s latest data, Islamic banking deposits now account for over 25pc of total deposits, crossing Rs9.5tr, while Islamic banks’ share in financing has reached 30.5pc. Dedicated Islamic banks such as Meezan Bank, Faysal Bank, Dubai Islamic Bank, and Bank Islami continue expanding their networks, while major conventional banks — HBL, UBL, and Bank Alfalah — have substantially grown their Islamic windows.
However, this transition is not only a regulatory or operational reform; it is fundamentally an intellectual and structural challenge. Shariah-compliant finance requires expertise in Islamic jurisprudence, accounting, law, economics, financial engineering, and technology. Without a trained workforce capable of designing, structuring, auditing, and managing Islamic financial products, the shift risks becoming symbolic rather than substantive.
Thus, Pakistan’s Islamic finance education ecosystem becomes the central pillar of the country’s transformation. To support the emerging financial landscape, universities must produce graduates who understand both Shariah foundations and modern financial systems.
Although progress has been made, significant gaps remain. In 2015, SBP supported the establishment of three Centres of Excellence in Islamic Finance (CEIF) at IBA Karachi, Lahore University of Management Sciences, Lahore, and Institute of Management Sciences, Peshawar.
Some universities — including Bahauddin Zakaria University Multan, COMSATS, International Islamic University, Islamabad, Institute of Business Management Karachi, Hailey College Lahore, and NED University Karachi — have set up Islamic finance programmes or dedicated centres.
Yet, across most higher education institutions, Islamic finance remains limited to one or two elective courses at the undergraduate or graduate level. This leaves business, accounting, and finance graduates at a significant disadvantage in the rapidly changing job market.
The Higher Education Commission (HEC) has attempted to introduce a national curriculum for Islamic finance, but implementation has been inconsistent. A major barrier remains the shortage of qualified faculty capable of integrating classical jurisprudence with contemporary financial technologies, quantitative methods, and regulatory practices.
To build a coherent and sustainable Islamic finance education ecosystem, Pakistan requires a coherent national strategy. To form the foundation for such a roadmap, academia-industry collaboration needs to be strengthened with banks, regulators, and financial institutions partnering with universities to establish Islamic finance centres, sponsor research, develop case studies, and offer structured internships and apprenticeship programmes.
Islamic finance must become a core component of business, accounting, finance, economics, law, and fintech programs and not be limited to elective courses. Professional certification and continuous learning programmes for industry and existing bankers need to be encouraged.
Research and innovation funds dedicated to Islamic finance research, fintech innovation, case studies, and PhD scholarships can help Pakistan develop its own intellectual capital.
Islamic finance is more than an alternative banking system — it represents a values-based approach grounded in justice, equity, risk-sharing, and real-sector economic activity. For a country grappling with rising inequality, unsustainable debt, and speculative financial cycles, Islamic finance offers both moral direction and economic renewal.
But no financial transformation can succeed without intellectual infrastructure. Embedding Islamic finance into Pakistan’s higher education system will cultivate a new generation of professionals who view finance not merely as a means of profit, but as a tool for social welfare and sustainable development.
As Pakistan moves decisively toward interest-free banking, universities and policymakers must take the lead. The future of Islamic finance will not be shaped in boardrooms alone — it will be built in classrooms, libraries, and research centres across the country.
Ahmed Ali Siddiqui is the founding director of IBA CEIF and can be reached at aasiddqui@iba.edu.pk and Dr Maqbool Hassan is an industry dellow at Meezan Bank and assistant professor at Bahria University
Published in Dawn, The Business and Finance Weekly, December 1st, 2025
