Islamic start-up funding for small businesses is set to boom in Britain as the UK cements its position as the top Western centre for Sharia-compliant finance.

Total Sharia-compliant banking assets in the UK — including Islamic finance offered by conventional high street banks — were around £4.1 billion in the first half of 2018, according to a report published today by TheCityUK and law firm Trowers & Hamlins.

According to ‘Global trends in Islamic finance and the UK market 2019’, there is a growing need for Islamic finance in Britain, due mainly to the burgeoning Islamic population.

‘Islamic banking has considerable growth potential,’ says the report.

Global Islamic banking assets totalled around $1.7 trillion at the end of 2017, an increase of 2.7% year on year.

Thomson Reuters expects the average growth rate of Islamic business assets will be around 7% during 2018-2023, up from an average of 6.1% between 2012 and 2017.

The global Muslim population of around 1.8 billion accounts for around 25% of the world’s population, but Sharia-compliant banking assets make up only 6% of the world’s banking assets.

The UK is the 17th biggest market for Islamic finance out of 48 countries, but the first among non-Muslim-majority nations, putting it ahead of the US, Switzerland and Germany.