The value of financing contracts compliant with Islamic Sharia principles rose to SAR2,471.6bn ($659.1bn) by the end of 2024, an increase of 13% compared to 2023, Argaam reported on April 28.

According to data issued by the Saudi Central Bank (SAMA), Islamic-compliant financing contracts include Murabaha, Tawarruq, Ijara (leasing), Mudaraba and Musharaka, in addition to other contracts including credit cards and other Sharia-compliant financing formulas.

Financing contracts for the Murabaha and Tawarruq sectors accounted for 89% of the total value of contracts, with Murabaha reaching SAR1,259bn ($335.7bn) and Tawarruq at SAR948.2bn ($252.9bn) by the end of 2024.

The steady growth in Islamic financing contracts reflects the increasing demand for Sharia-compliant financial products in Saudi Arabia, which has been consistent over the past several years, according to the quarterly data.

Islamic finance contracts have shown continuous growth since 2020, with year-on-year increases ranging between 10% and 20%. The fourth quarter of 2024 showed an acceleration in growth compared to previous quarters in the year.

Ijara (leasing) contracts stood at SAR219.4bn ($58.5bn) by the end of 2024, while Mudaraba and Musharaka contracts remained relatively small components of the Islamic financing landscape at SAR2.2bn ($0.59bn) and SAR1.9bn ($0.51bn) respectively.

Other Islamic financing formats, including credit cards and alternative Sharia-compliant structures, reached SAR41bn ($10.9bn) by the end of 2024, showing continued diversification in the Islamic finance sector.