Azerbaijan ranks 46th in Global Islamic Fintech Index

Azerbaijan has ranked 46th in the Global Islamic Fintech Index (GIFT) with an overall score of 16.2%, Report informs.

According to the Global Islamic Fintech Report, the index covers 64 countries, including members and non-members of the Organization of Islamic Cooperation. Countries are assessed based on 19 indicators grouped into five key categories: talent, regulation, infrastructure, the Islamic fintech market and ecosystem, and capital.

In the previous 2024/2025 report, Azerbaijan was ranked 37th with a score of 20.4%, indicating a decline in its position in the latest edition of the index.

According to the document, the category "Islamic fintech market and ecosystem" carries the greatest weight in the index calculation, as it most accurately reflects the current state and level of development of Islamic fintech in a given country. The index highlights jurisdictions that are most favorable for the growth of Islamic fintech and the formation of sustainable ecosystems.

Saudi Arabia topped the ranking with a score of 79.4%, followed by the United Arab Emirates with 68.8% and Pakistan with 44.2%. At the lower end of the list are Palestine with 4.6%, Yemen with 4.5%, and Suriname with 2.1%.

The volume of transactions in the global Islamic fintech market in 2024–2025 is estimated at $198 billion. According to forecasts, this figure is expected to rise to $341 billion by 2029, representing a compound annual growth rate of 11.5%.

The report notes that this pace exceeds the growth rate of the global fintech industry as a whole, which is projected to expand by around 11% annually over the same period.

Among the key challenges facing the global Islamic fintech market, analysts highlight limited access to capital, regulatory compliance difficulties, low customer awareness, challenges in geographic expansion, and high user acquisition costs. Despite these obstacles, the sector continues to grow, with the global database currently listing 484 Islamic fintech companies.

At the same time, Islamic fintech still accounts for only a small share of overall fintech activity. Experts believe this gap represents the main potential for the next wave of growth.

The report also points out that many Islamic financial products remain outside everyday economic processes, making their distribution costly and slow. Embedded financial solutions, such as Sharia-compliant buy now, pay later services or micro-takaful products, are seen as capable of being seamlessly integrated into e-commerce ecosystems, mobile applications, and digital B2B platforms.

According to reports by Dealroom and ABN AMRO Ventures, the global embedded finance market is expected to reach $7.2 trillion by 2030. Boston Consulting Group forecasts that such markets could generate more than $700 billion in additional annual revenues by 2030, with Islamic fintech viewed as part of this broader global trend toward integrated financial services.

Analysts also note that a digitally engaged population, a developed Islamic finance sector, and targeted fintech support programs create favorable conditions for innovation, particularly in testing and scaling practical solutions.

Experts believe Islamic fintech is entering a new phase of growth, with technologies such as artificial intelligence, blockchain, and open banking enabling the creation of new products and lowering entry barriers. As regulatory frameworks and ecosystem support continue to evolve, more players are expected to enter the market, increasing competition while opening opportunities for partnerships and selective consolidation.

In the long term, these developments are expected to significantly expand access to financial services that comply with Sharia principles.

The Central Bank of Azerbaijan has developed a roadmap for introducing the "Islamic window" model to apply Islamic banking products in the country. Islamic banking is viewed as an alternative financing mechanism and is included among the CBA's strategic objectives.

International experience has already been studied, and the most suitable approach for Azerbaijan has been identified. At the initial stage, independent experts within the Islamic window framework will determine the range of Islamic finance products, after which basic instruments will be introduced based on consultations with financial associations and international experts.