Pakistan’s Islamic finance industry set to surpass $100bn by 2027

According to Mettis Global, Fitch Ratings expects Pakistan's Islamic finance industry to pass $100 billion by 2027. The agency said the shift toward Shariah-compliant finance has advanced fastest in banking, where policy direction is clearer and regulators are overseeing the conversion of conventional lenders while backing new Islamic banking branches. Fitch also noted that reaching a fully Shariah-compliant system by 2028 will require much faster development in sukuk, takaful and non-bank Islamic financial institutions.

Islamic banks held 38.2% of total sector financing in the first quarter of 2026, up from 25.5% in 2024. Their deposit share rose more slowly, to 28.5% from 24.9% in 2024, which Fitch read as mixed acceptance by depositors. Islamic banking branches run by conventional lenders now make up 42.8% of total Islamic banking assets.

Deposits at Islamic lenders climbed close to 40% during 2025, while those at conventional banks rose about 20%. Since 2025, the SBP has mandated that Islamic banks offer profit on rupee savings deposits, which strengthens their position against conventional lenders. Takaful held 15% of insurance premiums in 2024, up from 12% in 2023, while sukuk made up about 4% of debt capital-market issuance in January to June 2026. The industry was put at more than $90 billion at the close of 1H26, with Islamic banking assets making up 58% and outstanding sukuk 29%.