According to an analysis, Islamic syndicated financing is projected to continue being a significant source of funding in 2026 for Saudi Arabia and the UAE, largely due to its relative simplicity when compared to sukuks and bonds.
Fitch Ratings' most recent report reveals that global Islamic syndicated financing experienced a growth of approximately 16 percent year over year in 2025, reaching outstanding amounts totaling around $215 billion.
Also Read: Deputy PM Underscores Three Infrastructure Pillars for VIFC
This particular financial instrument conforms to Islamic law and entails various lenders pooling their funds to provide financing to a borrower. Financial institutions and banks apply these arrangements to collectively allocate resources and mitigate risk in accordance with Islamic finance principles.
He added that the expansion of Islamic syndicate financing has the potential to be expedited by anticipated cuts in the Federal Reserve interest rates, decreases in oil prices, diverse funding requirements across sectors, and the aim to diversify sources of funding in key markets.
According to the report, by the conclusion of 2025, the Kingdom dominated the global Islamic syndication market with a share of 34 percent, surpassing the UAE at 33 percent and Egypt at eight percent.
The goal of the Saudi government is to secure up to 50 percent of its 2026 sovereign funding needs from private markets, which may include syndication.
Also Read: CrowdStrike Names Jonathon Dixon as VP & MD
Government-affiliated organizations play a crucial role in driving development expenditure in the United Arab Emirates and are expected to increase their borrowing, possibly through collaborative financial arrangements. Egypt still benefits from strong backing from both bilateral and multilateral lenders.
The report issued a warning regarding the potential hindrance to Islamic syndications from government initiatives aimed at bolstering sukuk and debt capital markets in regions such as the Gulf Cooperation Council, Egypt, ASEAN, and Turkiye. This caution was based on the increasing availability of alternative funding sources, including non-bank financial institutions, certificates of deposit, and private credit.
Also Read: SK, Nvidia Chiefs Talk AI chips over Chimaek
Fitch noted that the growth of Islamic syndicated financing could potentially be impacted by evolving and varying Shariah requirements, as well as geopolitical and market volatilities.
In January, the Saudi Press Agency announced that the International Islamic Trade Finance Corp., a part of the Islamic Development Bank Group, was recognized as the leading Bookrunner and Mandated Lead Arranger in the 2025 Islamic syndicated finance deal rankings released by Bloomberg and the London Stock Exchange Group Data & Analytics on a global scale.