Qatar’s Islamic or Sharia-compliant Fintech sector is on track to record significant growth in the next 5 years, according to local sources.
— Qatar Financial Centre (@QFCAuthority) March 21, 2021
As first reported by Doha News, the Islamic Fintech industry in Qatar is expected to expand by $2.1 billion within the next 4 years. This, according to the Global Islamic Fintech Report 2021.
Qatar has notably ranked 10th in the Global Islamic Fintech (GIFT) Index. The MENA region nation’s rapidly-evolving ecosystem makes it an ideal business hub that needs to be on investors’ “horizons,” according to a report from local sources.
The Islamic Fintech sector in Qatar is on track to grow at a CAGR of 19.6% and is expected to be worth billions by 2025, the Global Islamic Fintech Report 2021 revealed.
The Islamic or Sharia-compliant Fintech ecosystem in Qatar is estimated to be valued at $849 million (as of late 2020). The 10 biggest Fintech markets are dominated by the Organization of Islamic Cooperation (OIC) nations, the report confirmed.
Henk Jan Hoogendoorn, MD Financial Sector Office at the Qatar Financial Centre or QFC Authority, noted that Islamic Fintech has a lot of potential to further expand in the reglon. He added that the QFC will be supporting an Islamic financial hub, and will work cooperatively with the Qatar Fintech Hub, so they can extend support to Islamic Fintech startups.
Qatar may have a competitive advantage over other Middle Eastern or MENA region countries because it has been focused on supporting progressive policies such as knowledge-based economic initiatives. Qatar has also been active on the international level with projects such as Doha Debates.
The National Fintech Strategy, which has been established by the Qatar Central Bank (QCB), offers a set of guidelines for projects that allows them to set up business operations while working with international Fintechs and other companies.
This particular framework and guidelines includes special incentives for startups during their initial year of operations. There’s also a waiver of application fees and they need not pay 1st -year registration fees. Innovative Fintechs and other startups may also be provided with workspaces without paying rent while they prepare to launch their businesses.
Currently, the Islamic Fintech ecosystem is valued at almost $50 billion (globally) and it’s on track to grow by around 21% every year. It’s projected to be valued at $128 billion by 2025 (if these growth rates remain consistent).
As covered recently, Islamic or Sharia-compliant Fintech services are increasingly being adopted in the wider MENA region and globally. These types of services are being increasingly adopted in Saudi Arabia, the United Arab Emirates (UAE) and internationally as well, according to a report from Arabian Business.
As reported by the news outlet, the largest transaction volumes have come from Saudi Arabia, the UAE, Malaysia and Indonesia.
The Dubai free zone, which provides business licenses to foreign-owned companies (with each zone focused on one or more industry categories and only issues licenses within those segments), has been established to support various initiatives. This also includes a regulatory framework for crypto-related firms.
Notably, Saudi Arabia has now spent around $4.5 billion on industrial support (during 2020). Meanwhile, the UAE’s largest Islamic bank has helped 54,000 clients with gaining access to modern financial services throughout the COVID-19 crisis.
In addition to these developments, Fintech transaction volume among OIC (Organization of Islamic Cooperation) member countries was estimated at roughly $49 billion last year (with Saudi Arabia and the UAE maintaining their lead).
In another update from Arabian Business Global, it has been revealed that BigTech and Fintech are beginning to compete more meaningfully with the traditional banking sector. Analysts claim that these banking and Fintech challengers could acquire a substantial share of the market from incumbents.