THE ROLE OF EDUCATION AND CAPACITYBUILDING IN DEVELOPING THE ISLAMIC FINANCE INDUSTRY: A THEORETICAL AND COMPARATIVE ANALYSIS

Abstract

This article presents a theoretical and comparative analysis of the role of education and capacitybuilding
in the development of the Islamic finance industry. The central argument is that the long-term growth of
Islamic finance depends not only on capital, regulation, and product innovation, but also critically on the supply
of qualified human capital capable of combining competencies in finance, economics, and Shariah principles.
While the global Islamic finance industry reached approximately USD 5.98 trillion in assets in 2024, reflecting a
21 percent year-on-year increase, and is projected to reach USD 9.7 trillion by 2029, the supply of specialised
professionals has lagged behind, resulting in a persistent talent gap. Drawing on the experience of leading
jurisdictions such as Malaysia, the Gulf Cooperation Council (GCC) states, the United Kingdom, and Indonesia,
the article compares two models of human capital formation: the institution-led, centrally coordinated model and
the market-led, fragmented model, and evaluates their effectiveness. The analysis applies human capital theory
to the specific knowledge requirements of Islamic financial institutions and identifies education, professional
certification, Shariah scholarship development, and research as the four pillars of capacity-building. The findings
indicate that a coordinated national education strategy, anchored by a dedicated institution and aligned with
industry demand, is the most effective mechanism for closing the talent gap and sustaining industry growth.