With recent years seeing strong growth in its banking, takaful (Islamic insurance) and sukuk (Islamic bonds) subsegments, Qatar’s Islamic finance sector is both a regional leader and a centre for international investors. Advances in financial technology (fintech) and the digitalisation of Islamic finance services are helping Qatar’s sharia-compliant finance sector secure a larger market share both at home and abroad, cut costs across the value chain and boost revenue. A strong regulatory framework has also underpinned this success, with Qatari authorities committed to furthering Islamic finance’s growth and development through a series of targeted sector master plans. Today, in a region and world facing new and emerging uncertainties, the Islamic finance sector stands as a reliable and trusted pillar of Qatar’s economy.
Oversight
Overall supervision of the country’s robust financial sector – both Islamic and conventional entities – falls under the purview of the Qatar Central Bank (QCB). Within the central bank, the Supervision Department has a series of desks, each with responsibility for a different segment of the sector, such as banking, insurance and takaful, capital markets and other financial institutions.
As of 2025 the QCB did not have a dedicated Islamic finance department, or sharia board. Instead, Islamic banks and insurance companies each have their own sharia boards that follow international financial supervisory institutions, including the Islamic Financial Services Board (IFSB), Basel Committee on Banking Supervision (BCBS) and the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
In addition, Qatar is home to Qatar Financial Centre (QFC), where a broad range of sharia-compliant financial institutions are based. All entities registered in QFC are subject to the QFC Regulatory Authority (QFCRA). The financial institutions are further subject to the Qatar International Court, rather than regular Qatari courts, regarding civil and commercial matters. The rules around company licensing and taxation at QFC – as elsewhere – are set down by the Ministry of Commerce and Industry. Article 77 of QFC founding law regulates and defines takaful activity within the centre.
A third regulatory body is the Qatar Financial Markets Authority (QFMA), which regulates the Qatar Stock Exchange (QSE). All companies listed on the QSE, whether Islamic or conventional in structure, must follow the QFMA’s requirements and instructions. The QFMA and the QFCRA report to the QCB.
While most sharia-compliant banks and takaful companies are listed on the QSE’s main indices, the QSE also offers the Qatar Exchange Al Rayan Islamic Index. To be listed on the index, companies must comply with the sharia standards set by the QSE and the QFMA. As of mid-April 2025, the index was home to some 21 companies with a combined market capitalisation of QR74.1bn ($20.3bn).
Regulations
In early 2025 Qatar’s Islamic finance institutions were closely following developments with the AAOIFI’s Standard 62. This standard envisages Islamic bonds becoming asset backed, rather than asset based, with a worldwide consultation on the update under way at the time of writing. The eventual form and timeline for implementation are still yet to be finalised; however, it is likely to impact sukuk and sukuk issuers, such as Qatar’s Islamic banks, in the coming years.
For Islamic banks, the QFCRA has also been implementing the Islamic Banking Business Prudential Rules 2015 framework, which was recently updated. The new system, the Islamic Banking Business Prudential (Amendment) Rules 2024, includes updated capital adequacy ratios and updates to current IFSB credit risk and BCBS counterparty credit risk regulations, among other changes included in the package.
Plans & Programmes
Qatar National Vision (QNV) 2030 is the country’s long-term development plan, with the blueprint broken down into a series of shorter-term strategies and sectoral-specific programmes. The current phase of QNV 2030 is the Third National Development Strategy, while the financial sector is implementing the Third Financial Sector Strategy (FSS-3) for 2024-30. This strategy works in tandem with the central bank’s overall programme, the QCB Strategy 2024-30.
The FSS-3 seeks to implement five themes: improved governance and regulatory oversight; digital innovation and advanced technologies; environmental, social and governance (ESG) and sustainability; talent and capabilities; and Islamic finance development. As such, the Islamic finance sector is specifically targeted for support and development under the plan. Indeed, this approach follows the overall strategy of QNV 2030 to make Qatar a regional and international centre for Islamic finance. The overarching goal of the FSS-3 is for the country’s financial services to provide a wider range of Islamic products in banking, insurance and capital markets, as well as make Qatar a regional leader in digitalisation in the sharia-compliant space.
The FSS-3 seeks to achieve its objectives by implementing measures across segments of the Islamic finance sector and strengthening broader enablers of financial system development. These include enhanced governance and regulatory frameworks, boosted human resources, emphasis on fintech and the strategic deployment of advanced technologies such as artificial intelligence. The framework promotes the wider integration of ESG principles and sustainable financial practices.
Global Reach
Given the worldwide prevalence of Islamic financial services, a number of Qatar’s Islamic finance institutions have expanded their international footprint. For instance, Qatar Islamic Bank (QIB) already has a global presence, with an investment portfolio in countries including the UK, Sudan and Lebanon. In addition, in February 2025 the UN Development Programme and QFC announced that they were to cooperate on bolstering progress towards achieving the UN Sustainable Development Goals through Islamic finance, in particular impact investment strategies and expanding the use of Islamic financial instruments.
This approach is of particular relevance to countries in the global south, given that such a strong socio-economic framework may be able to significantly contribute to improving economic outcomes for individuals and businesses alike. More broadly, Qatar’s robust regulatory framework – underpinned by entities like the QCB and QFC – has enabled Islamic financial institutions to efficiently structure cross-border transactions with neighbouring markets securely and efficiently.
According to Qatari consultancy Bait Al Mashura, the total assets of Qatar’s Islamic finance sector reached approximately QR656bn ($180.1bn) by end-2023. This figure was up 3.3% from 2022. Islamic banking accounted for 87.6% of the total market value, while sukuk accounted for 11.1% and takaful insurers accounted for 0.7%.
Banking
Of the 16 banks operating in the country, four are local Islamic institutions listed on the QSE, with one, Lesha, listed on the QSE and operating under a QFC licence. QInvest and Abu Dhabi Islamic Bank (Qatar Branch) also operate from the centre. The former is active in investment banking and asset management only, while the latter deals primarily with corporations rather than individuals.
Qatar’s sharia-compliant banks accounted for approximately 25% of total domestic sector banking assets in the third quarter of 2024, a share that has remained moderately stable. In 2023 Islamic lenders accounted for around 30% of the banking sector’s total financing, with a compound growth rate of 5.8% over the 2019-23 period, according to Bait Al Mashura. Meanwhile, the growth rate for conventional banks during that period was approximately 3.8%, underscoring the strength of the segment.
Further, in 2023, 96% of the Islamic banks’ total financing was directed to local customers, similar to 95% among conventional banks. The largest sector receiving financing from sharia-compliant banks was consumers (62% of the total financing of conventional banks), followed by real estate (42%), construction (40%) and industry (36%).
Also that year, Qatar’s Islamic finance landscape was dominated by murabaha (cost-plus financing) and musawama (bargaining sale), which collectively accounted for around 76.3% of the country’s total Islamic financing volume. Ijara (leasing) and Ijara MBT (lease to own) represented 21.3% of the total, while istisna’a (deferred delivery) constituted 0.2%. Participatory finance emerged with a 1.4% share, comprising approximately 1.2% in participatory instruments and 0.2% in mudaraba (profit sharing).
Two of the country’s three largest banks, QIB and Al Rayan Bank, are sharia-compliant. QIB is the second-largest bank in the country after the Qatar National Bank Group (QNB Group) and is among the six largest Islamic banks in the MENA region. At the end of 2024 the lender had total assets of approximately QR200.8bn ($55.1bn) and a market capitalisation of around QR50.5bn ($13.9bn). Meanwhile its market share of the sharia-compliant banking segment stood at approximately 37% as of mid-2025.
QIB is one of the state’s oldest banks, dating back to 1982. It was Qatar’s first sharia-compliant bank, with a total of 21 branches and offices by the end of 2024. Its largest individual shareholder is the Qatar Investment Authority (QIA), the country’s sovereign wealth fund, which held a 16.7% stake in 2024. The bank held an impressive “A/F2/Stable” rating from Fitch Ratings in January 2025.
At year-end 2024 AlRayan Bank reported total assets of QR171.1bn ($47bn), with a 31% share of Qatar’s Islamic banking market. This positioning translated to an 8.5% stake in the country’s broader banking sector. The bank’s market capitalisation on stood at QR22.9bn at ($6.3bn) at end-2024. In May of that year Moody’s assigned AlRayan Bank a credit rating of “A2/P1” with a stable outlook.
AlRayan Bank – formerly known as Masraf Al Rayan – was incorporated in 2006. The name changed to its current form after it merged with Al Khalij Commercial Bank in November 2021. The bank has a subsidiary of the same name in the UK and other subsidiaries in France and the UAE under the Al Khaliji Bank brand. Its largest individual shareholder is the QIA, which holds a 20.6% share; the Armed Forces Investment Portfolio (7.5%) and the General Retirement and Social Insurance Authority (GRSIA) pension fund (5.7%) are also notable shareholders.
Dukhan Bank, meanwhile, was Qatar’s fifth-largest bank at the end of 2024. It is also the result of a successful merger. In 2019 it joined, as Barwa Bank, with International Bank of Qatar. Dukhan Bank was incorporated in 2008 and began operations in 2009. At year-end 2024, the bank had a headquarters in Lusail and eight branches operating in Qatar. Total assets were QR117.9bn ($32.6bn). Its principal shareholders were GRSIA (24.5%), the Military Pension Fund (11.7%) and the QIA (7%); its most recent rating from Fitch was “A/Stable/bb+”.
Adding to the large sharia-compliant contingent on the QSE is the Qatar International Islamic Bank (QIIB). The lender’s total assets at the end of 2024 stood at around QR60bn ($16.5bn). QIIB was incorporated in 1990 and has a head office in Doha and 16 local branches. In February 2025 Fitch rated QIIB “A/Stable/bb+”. The final QSE-listed Islamic bank is Lesha Bank, which was the first independent sharia-compliant bank in QFC and has an investment focus. Lesha Bank held total assets of QR6.8bn ($1.9bn) at the close of 2024.
As revealed by their ownership structures, Qatar’s Islamic banks enjoy strong government participation and support. This factor, combined with strong overall fundamentals, have helped boost their international ratings. Indeed, in February 2025 Fitch reported that the segment had high popularity, solid branch and digital networks and products with “mainstream relevance”. As of early 2025 the international ratings agency expected sound asset quality, including adequate provisioning for impaired finance, to continue throughout 2025.
Takaful
Qatar’s Law No. 13 of 2012 contained the government’s first specific regulations regarding the Islamic insurance sector. Islamic insurance has been available in Qatar since 1995, when the Qatar Islamic Insurance Company (QIIC) began operations. Conventional insurers Doha Insurance Group (DIG) and Qatar General Insurance and Reinsurance Company (QGIRC) have sharia-compliant subsidiaries in the General Takaful Company and Doha Takaful Company, respectively. DIG and QGIRC are each listed on the stock exchange.
In April 2024 Qatar’s first digital takaful and insurance regulations came into force. The regulations apply to any digital insurer seeking to operate in Qatar, whether standalone or through the digital window of an existing insurer or takaful entity.
According to Dubai-based SHMA Consulting, takaful’s share of the domestic insurance market has grown at pace in recent years. In the third quarter of 2023, takaful companies accounted for a 5% market share; by the third quarter of 2024, the figure had increased to 7%. As of mid-2025 the domestic takaful sector consisted of five companies, two of which are the takaful subsidiaries of conventional players. The other three – all of which are listed on the stock exchange – are QIIC, the Al Khaleej Insurance Company and Damaan Islamic Insurance, the last of which is known as Beema.
Foreign Takaful
Four branches of foreign takaful companies operate in the country and are licensed by QFC: MedGulf Allianz Takaful, T’azur Company, Takaful International Company (TIC), and SEIB Insurance and Reinsurance, which has an Islamic window. The first three are QFC-based branches of takaful companies first established in Bahrain, while the third is a Qatari company. MedGulf and TIC have a corporate takaful focus, while the other two offer individual and corporate business.
Of the three independent takaful providers listed on the QSE, QIIC is the largest. The cooperative company began operations in 1995. Indeed, QIIC is the second-largest company on the QSE insurance board, which includes conventional and takaful operators. QIIC was Qatar’s first sharia-compliant policy issuer and the first Qatari insurer to offer insurance products online. US-based credit rating agency AM Best assigned it an Islamic finance sector rating of “A- (Excellent)” for the 2024 financial year.
Beema, the second-largest domestic Qatari takaful outfit, started operations in 2009. In 2022 it was converted to a public shareholding company, listing on the QSE in January 2023. Its principal shareholders include QIC, Al Rayan Bank, Barwa Real Estate Company and QInvest.
Meanwhile, Al Khaleej Bank is a more veteran sharia-compliant insurer, incorporated by Amiri decree in 1978. At the end of 2024 the company had two subsidiaries: Qatar Takaful Company and Mithaq Investments; however, Qatar Takaful was in the process of liquidation at that time.
General Takaful, a subsidiary of the QGIRC Group, was established in 2008 to offer sharia-compliant general insurance solutions in line with Qatar’s growing demand for Islamic financial services. Similarly, Doha Takaful began operations as a branch of DIG in 2006. It was converted into a limited liability company in 2018, reflecting the continued evolution of the takaful segment within Qatar’s insurance sector.
Investments & Funds
Qatar’s Islamic finance sector is underpinned by a growing institutional framework that includes three Islamic finance companies (IFCs), two Islamic investment companies (IICs) and four Islamic investment funds (IIFs), highlighting efforts to strengthen positioning as a regional leader in sharia-compliant financial services. The country’s three IFCs are Al Jazeera Finance (AJF), First Finance (FFC) and Qatar Finance House (QFH), while the IICs comprise First Investor Company (TFI) and the Investment House Company (IHC). The three IICs provided QR1.8bn ($494m) of finance in 2023, representing an increase of 4.8% from 2022.
Among the IFCs, AJF is the oldest, established in 1989, while QFH is the newest, established in 2006. FFC is the largest in terms of equity, with this standing at QR1.3bn ($356.8m) at year-end 2023. AJF had equity of QR967m ($265.4m) at that time, and QFH had QR103m ($28.8m).
TFI was established in 1999, while IHC began operations in 2001. The IICs provide investment banking services according to sharia principles. TFI was acquired by Dukhan Bank in 2009 and is now a wholly owned subsidiary of the Islamic bank. The total assets of the two IICs stood at QR522.3m ($143.4m) at year-end 2023, up 2.7% from 2022. In addition, one Islamic investment company, Al Rayan, established in 2008, operates under a QFC licence.
The IIFs are Al Bait Al Mali, Al Rayan GCC, First Investor Securities and Al Rayan Qatar ETF. These funds invest in listed and unlisted sharia-compliant stocks and shares, in Qatar and globally. Al Rayan GCC and Al Rayan Qatar are connected to AlRayan Bank, while First Investor was established by Dukhan Bank. Al Bait Al Mali Fund is managed by Amwal, with QNB Group undertaking investment custodianship; QNB (Switzerland) is the fund manager.
Sukuk & Islamic Stocks
Qatar is the third-largest debt capital market in the region, valued at around $130bn at year-end 2024. Within this, the Qatari government, via the QCB and Islamic banks, has been active in sukuk issuance in recent years, with some QR53bn ($14.5bn) issued over the 2019-23 period despite slow-downs resulting from the Covid-19 pandemic. The year 2024 was a bumper year for sukuk issuances, with some $7.4bn issued by Qatari institutions, up from $3.3bn in 2023 and $1.8bn in 2022, according to figures from asset management company Kamco Invest.
Performance
Qatar’s Islamic banks are in robust shape despite a recent period of external turbulence, including the blockade, the pandemic, regional and overseas conflicts, and subsequent global economic disruption. This highlights the strength and stability of the sector. Highlights for sharia-compliant banks in 2024 included Dukhan Bank having the highest credit growth among all Qatari conventional or Islamic lenders, at 11%. Meanwhile, QIB saw a 7% hike in profit, as well as 6.1% asset growth.
In takaful, QIIC saw its earnings rise from QR523.5m ($143.7m) in 2023 to QR551.1m ($151.3m) in 2024, while net profit rose from QR142.8m ($39.2m) to QR143.7m ($39.3m). The company’s gross written contributions (GWCs) rose from QR523.5m ($143.7m) to QR551.1m ($151.2m). Beema’s GWCs were up 27% to QR510.5m ($151.3m), while its shareholders’ net profit jumped by 20% to QR84.6m ($23.2m). Al Khaleej Bank also saw its takaful revenue rise that year, from QR211.8m ($58.1m) in 2023 to QR227.2m ($62.4m). Its GWCs rose from QR333m ($91.4m) to QR463.5m ($127.2m).
The year 2024 was also strong for sukuk, with issuance more than doubling its dollar value in the first nine months. Estithmar Holding, a QSE-listed company, issued the first Qatari riyal-denominated corporate sukuk on the London Stock Exchange, a QR500m ($137.2m) inaugural tranche of the QR3.4bn ($933.2m) Estithmar programme. QIB also issued a $750m sukuk in 2024. In January of that year, QIIB made a $500m sustainable sukuk issuance, followed by a similar $250m offering in July. In October, QIIB added $300m of additional Tier 1 capital certificates. The QIB and QIIB issuances were significantly over booked, demonstrating significant and sustained interest in Qatari sukuk.
Digital Transformation
Qatar’s Islamic finance sector has accelerated its digital transformation in recent years, with the Islamic fintech sector expected to reach a global value of $179bn by 2026, up from a base of $79bn in 2021 and with Qatar the sixth-largest market. A key driver in Qatar has been the Qatar FinTech Strategy, which leverages the country’s strong foundation in Islamic finance to boost its regional fintech standing. This strategic focus on Islamic fintech is one part of Qatar’s comprehensive plan to foster innovation and attract international fintech firms to the country.
On example was the March 2024 launch of Fawran Pay, a sharia-compliant instant payment solution for sending and receiving money in real time. By October 2024 Fawran Pay, a product of QIB, had been added to QP ay, the national e-commerce platform.
After signing a memorandum of understanding in 2023, QIIB and a number of Qatari fintech firms entered into a joint venture in December 2024 to bolster digital transformation in the institution to align with the QCB’s digitalisation agenda and QNV 2030. As part of the joint venture, QIIB will be assisted by FynPay in developing an app and other digital channels, expanding the bank’s digital footprint. Qatar’s QFC has been pivotal to this agenda, attracting Islamic fintech start-ups like Malaysia-based Ethis, a sharia-compliant investment platform with operations in Qatar, Oman, Indonesia and the company’s native Malaysia.
Outlook
Qatar’s Islamic finance sector is poised for sustained and dynamic growth, underpinned by robust regulatory frameworks, strategic government initiatives, and accelerating digital innovation. This expansion is expected to be driven by three primary factors: the deepening of digital transformation, continued regulatory advancements, and increasing diversification in sukuk instruments. The rise of Islamic fintech solutions will play a pivotal role in enhancing operational efficiency, broadening financial inclusion, and improving overall market penetration. At the same time, upcoming reforms from the AAOIFI are anticipated to significantly influence sukuk structuring, reinforcing Qatar’s position as a regional hub for Islamic capital markets.
Complementing these trends is the roll out of the FSS-3, which seeks to integrate ESG principles more deeply into financial activities and strengthen cross-border collaboration. A particular focus on impact investing and sustainable finance is expected to align Qatar’s Islamic finance ecosystem with global best practices while supporting national development goals. These converging developments position Qatar to not only consolidate its leadership in Islamic financial services but also to expand its regional and international footprint, leveraging innovation and policy alignment to drive long-term sectoral resilience and enhanced competitiveness.
Read More from OBG
