RIYADH: Islamic syndicated financing is set to remain a key funding source in 2026 for Saudi Arabia and the UAE, due to its lower complexity compared to sukuks and bonds, according to an analysis.
In its latest report, Fitch Ratings stated that global Islamic syndicated financing expanded by about 16 percent year on year in 2025 to around $215 billion in outstanding amounts.
This financial instrument is a type of arrangement that complies with Islamic law and involves multiple lenders providing funds to a borrower. Financial institutions and banks utilize these arrangements to pool resources and share risk, all while adhering to Islamic finance principles.
“We expect vibrant activity in 2026 with key drivers such as Islamic banks’ growing funding role in many national banking systems, ease of requirements, speed, and the lower complexity of syndications than sukuk and bonds issuance,” said Fitch’s Global Head of Islamic Finance, Bashar Al-Natoor.
He further said that the growth of Islamic syndicate financing could be further accelerated by expected Fed rate cuts, lower oil prices, cross-sector financing needs, and funding diversification goals in core markets.
