ALMATY, Kazakhstan, June 27. The first session on "Islamic Finance in Central Asia" has been held as part of the Eurasian Development Bank (EDB) Business Forum in Almaty, Trend reports.
The session participants discussed the fundamental principles of project financing in Central Asian states, examined related problems, and considered mechanisms for their resolution.
Addressing the event participants, Deputy Chairman of the EDB Board Ruslan Dalenov noted that EDB may become an active promoter of Islamic finance in the region. "EDB can become an active promoter of Islamic finance in the region, being an international organization with a broad base of clients. EDB may become a kind of regulatory sandbox to develop and implement the necessary regulatory amendments".
He also added that an "Islamic window" initiative will be launched at the EDB. "Islamic window in the Eurasian Development Bank in full format will be launched in 2025. Several pilot projects will be financed. This will make it possible to move to the financing of large investment projects".
Further speaking, Deputy Chairman of the Agency of the Republic of Kazakhstan on Regulation and Development of Financial Market Olzhas Kizatov pointed out that the share of Islamic banks in the total volume of banking assets in Kazakhstan is 195 billion tenge ($419.2 million). "The development of Islamic finance contributes to the increase of financial inclusion and access to Islamic finance for broad segments of the population that cannot use standard instruments. Kazakhstan has created the necessary legislative framework for the functioning of Islamic banks. To date, two Islamic banks are operating in Kazakhstan. As of May 1, 2024, the share of Islamic banks in the total volume of bank assets amounted to 195 billion tenge".
Deputy Minister of Finance of Russia Ivan Chebeskov emphasized that Islamic finance has significant potential in Russia. "It amounts to trillions of rubles equivalent, and we have a vast domestic market for Islamic finance. We also see potential for cooperation with other countries".
The topics of the speakers' reports and presentations were the influence of legislation and state regulation on the development of Islamic banking and finance.
Additionally, two agreements were signed during the event. EDB and consulting firm Dar Al Sharia inked a cooperation agreement in the realm of Islamic finance. Furthermore, a memorandum of understanding was signed between the bank and the Islamic Development Bank Institute (IsDBI) to foster Islamic finance development in Central Asia.
As of early 2024, the Islamic finance segment accounts for two percent of global banking assets, amounting to $4 trillion, and it's growing rapidly.
The average annual growth rate of Islamic assets worldwide was 10.5 percent from 2015 through 2021, compared to 5.8 percent for traditional financial assets.
Islamic banks have established strong positions in more than 40 countries around the world and are beginning to effectively compete with classical credit institutions.
The EDB began developing Islamic finance in 2023, with the support of the Islamic Development Bank (IDB), creating a special "Islamic window" for providing financing according to Islamic finance principles.
As a regional development bank, the EDB plans to act as a "conductor" and regional partner for Islamic investments in Central Asia.
