QISMUT – The new BRICS for Islamic Banking

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QISMUT – The new BRICS for Islamic Banking

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Similar to BRICS, which have been recognized as fast growing economies by Goldman Sachs in 2001, the next wave of Islamic banking will be driven by QISMUT: Qatar, Indonesia, Saudi Arabia, Malaysia, UAE and Turkey.


According to EY’s world Islamic banking competitiveness report, these six countries have been identified as rapidly growing markets (RGMs) in the Islamic banking industry. By 2018, these rapid growth markets will represent GDP of US$4.8 trillion, a mostly young population of around 419 million, trade flows of US$3.6 trillion, and banking assets of US$6 trillion.


QISMUT constitute of 78% of the total international Islamic banking assets with a 5 year CAGR of 16.8% (2008-12). The total asset size of Islamic banking with commercial banks of the QISMUT is USD 567 billion. Table below indicates the 5 year CAGR, asset size and market share of Islamic banking in the respective countries.



Country Name 5 year CAGR Asset Size ( in $ billion) Market Share
Qatar 31% 54 24%
Indonesia 42% 20 4.6%
Saudi Arabia 11% 245 53%
Malaysia 20% 125 20%
UAE 14% 83 17%
Turkey 29% 39 5.6%

Source: World Islamic Banking Competitiveness Report, 2013-14


Islamic banks are positive on future growth prospects but this entirely depends on the large scale operational transformation and the accounting standard developments by industry bodies pertaining to Islamic banking.


Indonesia Conundrum

Indonesia which has the largest Muslim population of around 200 million (85% of total Muslim population) unexpectedly holds a disproportionate market share of only 4.6% of Islamic banks. This implies that there is a huge untapped market for Islamic banking in Indonesia and the country’s central bank has placed its focus on this by adopting a ‘Grand strategy’ to develop this sector. The 5 year CAGR of Indonesia justifies the ongoing developments of Islamic banking in the country when compared to conventional banking growth at around 7%.



Source: World Islamic Banking Competitiveness Report, 2013-14


According to the Central Bank of Indonesia, there are 11 full-fledged Islamic banks and 23 banks with Islamic business units and 154 rural banks in Indonesia. This is substantially less when compared to its neighbouring country Malaysia, which has 16 full-fledged Islamic banks and 5 International Islamic banks.


Given the demographics, evolving market dynamics and regulatory upkeep around Islamic banking, it appears that Indonesia is prepared to catapult itself as the bellwether of the QISMUT bandwagon.


While Indonesia gets ready to launch itself in this domain, banking technology vendors like Nucleus Software can synchronously work with banks in Indonesia to understand Islamic banking better.



Nucleus Software is one of the world’s leading providers of Islamic banking solutions, which are used by some of the largest global and regional banks in the world. FinnOne, leading lending software for 7 years according to IBS Publishing, provides operational support, risk management and decision-making support to banks and financial services companies. To find out more about our Islamic Banking software product see here.

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About the Author

Arup Das, Vice President and Lending Product Head (P&L Management)

Mr. Arup Das is the Vice President and Lending Product Head (P&L Management) at Nucleus Software where he is responsible for taking the flagship product to the next level of global leadership. Before joining Nucleus, he held a variety of roles in strategy and product management with leading companies including CISCO, IPValue and Mphasis.


Tamwelat- July 29, 2017

Nice Step! Time for make financial value in the world. The separate attitude keeps us differ from the world's country now time going to change and Saudi Arabian country will take participate and other countries.


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About Nucleus

At Nucleus Software we are committed to providing efficient, modern yet proven software solutions for the global Banking and Financial Service industry. We have been pioneers in developing Retail Banking Software, Corporate Banking Solutions, Transaction Banking, Cash Management and Internet Banking Software since 1986. Our success spreads across more than 50 countries, and we serve our customers globally through our direct and partner operations across US, Europe, Asia-Pacific, Africa and the Middle East. We are known for our world-class expertise and innovation in lending and transaction banking technology. Our two flagship products, built on the latest technology are: FinnOne™ and FinnAxia™.