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 highlighted by a recent visit to Uzbekistan, Kyrgyzstan, and Azerbaijan by Mr. Muhammad Zubair, CEO of AlHuda Centre of Islamic Banking and Economics (CIBE), UAE a leading Islamic finance advisory and consultancy firm.
While the global assets of Islamic finance industry boast a value exceeding $4.5 trillion, CIS countries are just beginning to tap into this potential. This surge is driven by a combination of factors. Firstly, large Muslim populations in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan are seeking Sharia-compliant financial products. Secondly, governments in these nations are actively establishing legal frameworks to support Islamic finance development.
Finally, 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.
Mr. Muhammad Zubair, CEO of Alhuda CIBE, said that“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. Muhammad Zubair met with key industry leaders, including: Mr. Zafarjon Mustafaev, Chairman of the Leasing Association of Uzbekistan and CEO of Uzbek Leasing International A.O. Discussions focused on exploring potential future joint initiatives to develop the Islamic leasing (Ijarah) sector, Ms. Dustmatova Nargis, Chief of Growth and Chairwoman of the Fintech Association of Uzbekistan. Mr. Oybek N. Khalilov, Chairman of the Board of the Association of Professionals of the Insurance Market of Uzbekistan, and Mr. Khamidov Bakhtiyar, General Director of the Banking Association of Uzbekistan. To promote Islamic and finance, he also delivered a lecture on Islamic Banking and Finance at TEAM UNIVERSITY LLC.
Kyrgyzstan 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. Mr. Muhammad Zubair met with several key figures, including: Mr. Denis Khomyakov, CEO of Oxus, a microfinance network offering Islamic microcredit services in Afghanistan, Kyrgyzstan, and Tajikistan. Discussions centered on the prospects for expanding Islamic microfinance in the region, Mr. Alisher Akbaraliev, Executive Director of the Association of Microfinance Institutions (AMFO), Mr. Abdraev Anvar Karikeevich, President of the Union of Banks of Kyrgyzstan, Ms. Samara Maytasheva, Acting Head of the Islamic Financial Products Division at the National Bank of the Kyrgyz Republic.
In Azerbaijan, Mr. Muhammad Zubair 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. Muhammad 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.
Recognizing this potential, Alhuda CIBE is actively contributing to the growth of Islamic banking and finance in the CIS region. Through its multifaceted approach, the organization actively contributes to the sector’s growth and sustainability by facilitating the establishment of Sharia-compliant financial instruments, ensuring that financial products align with Islamic principles and meet the needs of diverse stakeholders. For raising awareness about Islamic finance among businesses and individuals Alhuda CIBE organized number of capacity-building workshops, to equip financial institutions and industry professionals with the knowledge and skills necessary to effectively operate within the Islamic finance framework. Moreover, for the past three years, Alhuda CIBE has been hosting the CIS Islamic Banking and Finance Forum annually. This event brings together experts, professionals, and stakeholders from the CIS region and beyond to discuss trends, challenges, and opportunities in Islamic banking and finance.
