Indonesia's Islamic Finance Sector Shows Robust Growth

Significant Milestone in Islamic Banking

Indonesia's Islamic banking assets have reached a significant milestone, totaling Rp975.94 trillion by August 2025. This represents a market share of 7.44% in the country's banking sector. The overall Islamic finance industry has shown impressive growth, with total aggregated assets reaching Rp3.030 trillion, which accounts for 11.4% of the national financial industry's total assets.

Key Drivers of Growth

The growth in Islamic finance is attributed to several factors, including increasing public awareness of Sharia-based economic values and strategic collaborations between regulators, financial institutions, and local governments. Dian Ediana Rae, Head of Banking Supervision at OJK, emphasized the importance of innovation and expanding access to Islamic finance for all levels of society.

Regional Significance: East Java's Leadership

East Java has emerged as one of the most active regions for Islamic finance in Indonesia. The province's strong social and educational foundation, supported by thousands of Islamic boarding schools (pesantren) and millions of students (santri), has contributed to its robust Islamic economic ecosystem. East Java received 10 awards at the 2025 Adinata Syariah Awards, highlighting its significant contribution to social welfare and economic empowerment.

Strategic Collaborations and Innovations

The Indonesia Islamic Finance Summit (IIFS) 2025, held in collaboration with Bank Jatim and OJK East Java, served as a platform for strengthening synergy and collaboration in the Islamic finance sector. Key initiatives included the signing of strategic partnerships, such as the Cash Waqf Linked Deposit (CWLD) program with Rumah Wakaf Indonesia and Gerakan Wakaf Indonesia. This innovative instrument combines investment and social functions, enabling depositors to contribute to social programs through profit-sharing mechanisms.

Future Outlook

Industry leaders expressed optimism about the potential of Islamic finance to drive inclusive and sustainable economic growth. Bank Jatim's commitment to developing Sharia-based products and services is expected to further expand the ecosystem. The collaboration between regulators, industry players, and local governments will be crucial in realizing Indonesia's vision of becoming a global center for Islamic finance.