Growth of Indonesian Sharia Financial Industry Assets until 2023

Indonesia's sharia finance industry has continued to strengthen over the past decade, reflected in its steadily increasing asset value.

This is evident from the *Report on the Development of Sharia Finance in Indonesia* (LPKSI) released annually by the Financial Services Authority (OJK).

According to the report, in 2014 the value of Indonesia's sharia finance assets was approximately Rp561 trillion.

Since then, its value has continued to increase, reaching Rp2,582 trillion (Rp2.58 quadrillion) in 2023, as shown in the graph.

Overall, during the 2014-2023 period, the value of Indonesia's sharia finance assets grew by 360% or approximately fourfold.

The value of sharia finance assets in 2023 also represents 10.95% of the total assets of the national financial services industry. The remaining 89.05% is held by the conventional financial services sector.

The value of sharia finance assets recorded in the OJK's LPKSI is an accumulation from 3 sub-sectors, namely:

1. Sharia banking;
2. Sharia non-bank financial institutions (IKNB) (consisting of insurance, financing companies, pension funds, sharia microfinance institutions, and specialized sharia financial service institutions); and
3. Sharia capital market (consisting of government sukuk, corporate sukuk, and sharia mutual funds, excluding sharia stocks).

The OJK also predicts that Indonesia's sharia economy and finance will strengthen further in 2024, continuing the post-Covid-19 pandemic recovery trend.

"This short-term recovery is supported, among other things, by the implementation of mandatory halal certification, especially for food and beverage products in October 2024, and for other products in 2026, which is expected to increase awareness and the adoption of a halal lifestyle in society," said the OJK in the 2023 LPKSI.

"In addition, the increasingly integrated economic and sharia finance policies in national development planning are expected to provide a conducive growth environment for the development of sharia economy and finance in Indonesia going forward," it continued.