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The UAE has ranked first for Islamic fintech amongst countries in the GCC, according to a Bloomberg Intelligence study. The country ranks third across the world, behind Malaysia and the UK.

The study investigated the proliferation of Islamic fintech startups in each country, and concluded that tailored regulation was a key driver for growth in the sector.

SMEs generated around 60% of UAE GDP in 2014, and the Bloomberg report reckons that serving this sector through peer-to-peer financing could create a “game-changing” situation for Islamic finance.

Investment in gold, buoyed by Islamic blockchain technology, could see a rise in the GCC. Consumer demand for the metal in UAE and Saudi Arabia fell by 5% in 2017 compared to 2016. According to the study, the development of Shari’ah-compliant gold-backed fintech products could create a boom in the industry.

The news will be a boon to markets in the UAE, since last year it was announced that consumers in the country were 10% less likely to select an Islamic product over a traditional alternative in the first half of 2017. Applications for Islamic personal finance also dropped by 22% in the same period.

The data, from comparison site yallacompare, shows how conventional banks have nabbed customer attention when it comes to personal loans and auto loans. Traditional lenders saw a 65% year-on-year increase in applications for car loans and a 35% increase in personal loan applications.

Despite this lull, UAE customers are gravitating towards Islamic banks when it comes to the provision on credit cards. The first half of 2017 saw an increase of 46% in applications for Islamic cards, compared to an 8% decline for the traditional counterpart.

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com