December 2, 2025 | 01:42 pm
TEMPO.CO, Jakarta - Indonesia's Islamic banking market share is lagging behind other Muslim-majority countries, said the head of the Center for Islamic Economics and Business Faculty of Economics and Business at the University of Indonesia (PEBS FEB UI), Rahmatina Awaliah Kasri. Indonesia is known to have the largest Muslim population in the world.
PEBS noted that the market share of Indonesian Islamic banking this year is parked at 7.3 percent, while Indonesia's population amounts to 242.7 million. This is far lower than in Saudi Arabia and Malaysia.
The market share of Islamic banking in Saudi Arabia reached 73.5 percent with a population of 31.5 million. Meanwhile, Malaysia's market share reached 33.2 percent with a population of 20 million.
Rahmatina argued that Indonesia must continue to bolster its market share of Islamic banking. "We must strive to increase the market share for Islamic banking towards 15-20 percent, which is a psychological threshold needed for sustainable and self-reinforcing industry growth," said Rahmatina at the launch of the Indonesia Sharia Economic Outlook 2026 at the University of Indonesia, Depok, on Monday, December 1, 2025.
On the other hand, Islamic finance assets have increased over the past five years, reaching Rp3,029 trillion as of September 2025. This marks a 68 percent leap compared to the Rp1,801 trillion recorded in 2020. These assets consist of Rp1,840.5 trillion in the Islamic capital market, Rp1,006.8 trillion in Islamic banking, and Rp182.2 trillion in non-banking financial industries.
In an optimistic scenario, PEBS projected that Islamic finance assets could reach Rp3,715 trillion in 2026. Meanwhile, in a moderate scenario, Islamic financial assets next year are projected to reach Rp3,565 trillion.
"And we project that Islamic finance assets can double in five years in an optimistic scenario, amounting to Rp5,439 trillion," said Rahmatina.
Editor’s Choice: OJK Records Rp3,050tn of Islamic Finance Assets by August 2025
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