Press release, issued by AlHuda Center of Islamic Banking and Economics (CIBE) on April 23, says Islamic banking and finance is experiencing a surge in popularity within the Commonwealth of Independent States (CIS) region, presenting a significant new market for financial services.
This was reportedly highlighted by a recent visit of CIBE CEO Muhammad Zubair to Uzbekistan, Kyrgyzstan, and Azerbaijan. While the global assets of Islamic finance industry boast a value exceeding US$4.5 trillion, CIS countries are reportedly just beginning to tap into this potential.
This surge is driven by a combination of factors: 1) large Muslim populations in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan are seeking Sharia-compliant financial products; 2) governments in these nations are actively establishing legal frameworks to support Islamic finance development; and 3) the desire to diversify economies beyond traditional sectors is fueling interest in Islamic banking as an alternative.
Though Islamic finance currently holds a small share of the CIS financial market, reports suggest substantial growth is imminent. Kazakhstan, for instance, aims to increase its Islamic banking assets to 3% by 2025, a significant jump from the current 0.2%. With its large Muslim population, supportive governments, and increasing awareness, the future of Islamic banking and finance in the CIS region appears promising, with the potential to be a key driver of economic growth and financial inclusion.
CIBE CEO said, “CIS region holds immense potential for Islamic banking and finance. We are witnessing a growing openness among policymakers and regulators, creating a fertile ground for the industry to flourish.” He emphasized the importance of collaboration, stating, "Banking, Insurance and Leasing are the backbone of any country's financial industry.
During his visit to Uzbekistan, Mr. Zubair met with key industry leaders and discussions focused on exploring potential future joint initiatives to develop the Islamic leasing (Ijarah) sector.
Kyrgyzstan reportedly presents a unique opportunity for Islamic microfinance. With approximately 15 Islamic banking, financial, and Takaful institutions already established, the country is among the few in the CIS to have passed a dedicated Islamic banking law.
In Azerbaijan, CIBE CEO reportedly explored the potential of Islamic Fintech with Mr. Ruslan Talibov, Chairman and Founding Board Member of the Azerbaijan Fintech Association. Fintech offers innovative solutions to deliver Sharia-compliant financial services more efficiently and conveniently. Meetings were also held with representatives from the Azerbaijan Banks Association, the Azerbaijan Microfinance Association, the Azerbaijan Insurance Association, and the Azerbaijan Banking Training Center.
Mr. Zubair expressed his optimism for the future of Islamic finance in the CIS. He highlighted the crucial role of Islamic microfinance in promoting financial inclusion, poverty alleviation, and socio-economic development.
AlHuda Center of Islamic Banking and Economics (CIBE) is a well-recognized name in Islamic banking and finance industry for research and provides state-of-the-art Advisory Consultancy and Education through various well-recognized modes viz. Islamic Financial Product Development, Shariah Advisory, Training Workshops, and Islamic Microfinance and Takaful Consultancies etc. side by side through our distinguished, generally acceptable and known Publications in Islamic Banking and Finance.
