Indonesia's Islamic Finance Industry Market Share Increased Until 2023

Indonesia's sharia finance market share continues to grow, although it remains significantly below the conventional finance industry.

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 2017, sharia finance only achieved a market share of 8.24% of the total assets of the national financial industry, while conventional finance held 91.76%.

Since then, the market share of sharia finance has continued to rise, albeit slowly, reaching 10.95% in 2023, as shown in the graph.

"At the end of December 2023, the total assets of sharia finance in Indonesia, excluding sharia stocks, had reached Rp2,582.25 trillion. This figure increased by 9.04% (yoy)," said the OJK in the 2023 LPKSI.

"This achievement reflects the growing size of the sharia finance industry in contributing to national economic development," it continued.

The sharia finance industry recorded in the OJK's LPKSI is an accumulation of 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).