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 capacity-building
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 expertise in finance, economics, and Shariah.
While the global Islamic finance industry reached approximately USD 5.98 trillion in assets in 2024, representing a
21% year-on-year increase, and is projected to reach USD 9.7 trillion by 2029, the supply of specialized 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) countries, 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.