Thomson Reuters, the Islamic Research and Training Institute (IRTI), an affiliate of the Islamic Development Bank Group, and the General Council for Islamic Banks and Financial Institutions (CIBAFI), today launched a new Indonesia Islamic Finance Report titled “Prospects For Exponential Growth” at a ceremony in Jakarta. The study was prepared in strategic partnership with CIMB Islamic Bank.

The ceremony, which took place in the Borobudur Hotel, Jakarta, was also attended by executive representatives from CIMB Group, Thomson Reuters, IRTI and CIBAFI and other industry stakeholders in Indonesia.

Rafe Haneef, Chief Executive Officer of CIMB Islamic Bank, said: “We are pleased to be a strategic partner with IRTI, Thomson Reuters and CIBAFI to support the provision of knowledge and market intelligence on the Islamic finance industry. Indonesia, having the world's largest Muslim population presents a wide spectrum of unique and untapped opportunities for Islamic finance to play a critical role in supporting the country’s economic development. We are confident that this study will provide a comprehensive insight into the development of the Islamic finance industry in Indonesia and how these opportunities can be best explored”

The study highlights how Indonesia’s vast natural resources and strategic geographic location, offers great potential for economic growth, and an array of opportunities for the Islamic finance industry. Unlike other countries, the Islamic finance industry in Indonesia has largely been built up on community based initiatives. This has led to the development of unique features such as the presence of rural Islamic banks, retail sukuk, Hajj funds and various innovative social finance initiatives. Now with the government making the development of the Islamic finance industry a key pillar in their overall economic growth strategy, the study expects the industry to grow into a strong and sustainable sector of the financial services industry, while still maintaining many of its unique products and services. The government is expecting this to drive up the market share of Islamic banking from 5 percent today to 11 percent by 2020.

Professor Dr. Mohamed Azmi Omar, Director General of IRTI, said: “With the remarkable introduction of the new Islamic financial services roadmap, the growth of the industry is estimated to more than double in the next five years. The study looks into retail and corporate growth opportunities across key Islamic financial sectors and asset classes; including Islamic banking, takaful, Islamic asset management, sukuk and Islamic social finance.”

Mustafa Adil, Acting Head of Islamic Finance at Thomson Reuters, said: “Despite recent economic headwinds faced by Indonesia, the country still holds unique underlying economic characteristics that would support accelerated growth and draw foreign investment. The recent announcement by Indonesian President Joko Widodo to ease restrictions on foreign investment in almost 50 economic sectors demonstrates the leadership’s willingness and commitment in fostering a business environment that is more attractive for new investments.”

 “The study is based on a retail consumer survey and exclusive interviews with leading stakeholders that highlights how Islamic finance growth will be driven by opportunities for Islamic banks to finance the development of expansion projects that tap into the real economy,” Mr. Adil added.

Abdelilah Belatik, Secretary General of CIBAFI, said: “The seventh in our series of Islamic Finance Country Reports, we are confident that the latest study provides the information and analysis required to better understand and capture the opportunities that Indonesia presents in the Islamic finance space. We have no doubt that in the coming decade, we will see Indonesia become a leading market and a key pillar for the growth of the global Islamic finance industry and broader Islamic economy.”