Day: May 21, 2025

A new report co-published by the Eurasian Development Bank (EDB), the Islamic Development Bank Institute, and the London Stock Exchange Group forecasts robust growth for Islamic finance in Central Asia. Titled “The Future of Islamic Finance in Central Asia,” the report was unveiled at the 2025 Annual Meetings of the Islamic Development Bank Group in Algiers, Algeria.

The study offers a comprehensive overview of the Islamic finance landscape across Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. While Sharia-compliant financing remains a relatively recent addition to the global financial system, having developed over the past three decades, it is becoming an increasingly significant component in the sustainable development strategies of Central Asian economies. All five governments are reportedly prioritizing the expansion of Islamic finance.

As of early 2024, the region is home to 18 Islamic banks and 14 non-bank financial institutions, including Islamic banking windows. The sector also features takaful (Islamic insurance) operators, microfinance institutions, Ijara (leasing) companies, and emerging Islamic FinTech ventures such as digital banks and wealth management platforms.

Total Islamic finance assets in Central Asia stood at $699 million at the start of 2024. According to the Islamic Finance Development Report 2024, Kazakhstan ranked 19th globally in terms of Islamic finance development, above the global average, and leads the regional market.

Projections in the report anticipate substantial growth. Islamic banking assets in Central Asia are expected to rise to $2.5 billion by 2028 and $6.3 billion by 2033. Kazakhstan is forecasted to remain the regional leader, followed closely by Uzbekistan, buoyed by favorable demographics, economic momentum, and the depth of national banking sectors.

The sukuk (Islamic bond) market is also poised for rapid expansion. Baseline forecasts suggest sukuk issuance could reach $2.05 billion by 2028 and $5.6 billion by 2033.

EDB Chairman Nikolai Podguzov highlighted the bank’s commitment to fostering this growth: “The further development of Islamic finance in Central Asia will expand financial inclusion and connect local businesses to the global Islamic market, contributing to regional economic growth. With the Islamic Development Bank Group’s support, the EDB has initiated the creation of an Islamic Window to finance projects in compliance with Sharia principles.” He added that key investment priorities will include energy, transport, social infrastructure, food security, and industry.