The Eurasian Development Bank (EDB) published a report titled “The Future of Islamic Finance in Central Asia”. It states that by 2028, the region’s combined GDP will reach US$675 billion.
By 2028, the total volume of Islamic banking assets in Tajikistan will reach $132 million, growing to $562 million by 2033. The volume of sukuk (Islamic bonds) is expected to increase to US$57 million by 2028 and to US$155 million by 2033.
With the current asset volume at US$699 million (0.01% of the global total), the region’s contribution to the industry remains small. However, with 85% of the population being Muslim, demand and opportunities are high.
The report notes that Islamic banks, insurance companies (takaful), fintech organizations, and investment firms already operate in the region.
Kazakhstan confidently leads the region: in the global Islamic finance development ranking, it holds 19th place. It is followed by Kyrgyzstan (32nd), Uzbekistan (63rd), Tajikistan (82nd), and Turkmenistan (111th).
Forecasts through 2033 are reportedly positive: Islamic banking assets are expected to grow to US$6.3 billion, and sukuk assets to US$5.6 billion.
The path to building an Islamic financial market in Tajikistan
A key milestone for Tajikistan’s Islamic finance development was joining the Islamic Development Bank (IsDB) in 1996. This marked the start of institutionalizing the Islamic financial model within the national economy.
According to data from the National Bank of Tajikistan cited in the report:
At the beginning of 2025, the country has one Islamic bank, two microcredit companies offering Islamic windows, five branches of Islamic credit organizations, and 33 banking service centers providing Sharia-compliant services.
There is also one Islamic leasing company (ijara) on the market.
A significant breakthrough occurred in 2019 when the country’s first Islamic bank, Tawhidbonk, was established by reorganizing a traditional bank. This step was historic, marking the transition from private initiatives to the formation of a full-fledged Islamic banking sector.
Another important player is Alif Bank. Through mobile platforms and online services, it offers products compliant with Islamic law, expanding access to interest-free financing.
The sector’s development is accompanied by steady growth. Since 2020, Islamic banking sector assets have increased by an average of 29.3% per year.
As of January 2025, their total volume reached $36 million, accounting for 0.9% of the total assets of Tajikistan’s banking system.
The report’s authors expect further expansion of branch networks, development of Islamic financial product infrastructure—including sukuk and takaful insurance—legal framework updates to support the sector, and intensified international cooperation with the IsDB and other Islamic financial institutions.
Recommendations for Developing Islamic Finance in Tajikistan
The report offers key recommendations:
Introduce a special law on Islamic banking. It should include rules for Sharia-compliant products, regulation of Islamic windows and microfinance organizations. Standards for issuing Islamic bonds (sukuk) should be established. The role of the Advisory Board on Islamic Banking under the National Bank must be clearly defined. This board should supervise operations, accredit institutions, and issue fatwas.
Develop the Islamic bond market. This requires creating a national platform for sukuk issuance and supporting projects financed through Islamic bonds. Sukuk could be used to cover budget deficits and finance sustainable development programs in regions.
Support Islamic fintech initiatives and develop a digital ecosystem for Islamic finance. The example of Alif Bank can be followed. New fintech companies operating under Sharia rules should be created, for example, in crowdfunding, peer-to-peer lending, and blockchain. Digital infrastructure should be improved, and necessary laws adopted.
Enhance financial literacy among the population. Educational campaigns should be conducted. University and professional programs on Islamic finance, Sharia, and banking need to be developed.
Simplify access to Islamic financial products. Expand the network of Islamic windows, microfinance organizations, and mobile platforms. Administrative barriers for creating new Islamic institutions should be lowered. Affordable products for low-income groups, such as microloans and interest-free leasing (ijara), are important.
Strengthen cooperation with international Islamic organizations. Continue working with the Islamic Development Bank and the Arab Coordination Group. Technical assistance and investment from Islamic funds should be attracted. Participation in international initiatives on Islamic finance standards is necessary.
