ALMATY, Kazakhstan, June 27. The share of Islamic banks in the total volume of banking assets in Kazakhstan is 195 billion tenge ($419.2 million), the Deputy Chairman of the Agency of the Republic of Kazakhstan on Regulation and Development of Financial Market Olzhas Kizatov said, Trend reports.
He made the remark during the session "Islamic Finance in Central Asia" within the framework of the Eurasian Development Bank (EDB) business forum in Almaty.
"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," he noted.
According to him, for the development of Islamic finance in Kazakhstan, increasing competition in the banking sector, and expanding the volume of lending to the economy, it is planned to establish the possibility of the implementation of Islamic finance by classical universal banks within the framework of "Islamic windows".
"Islamic banks in Kazakhstan are mainly engaged in lending to the corporate sector. In terms of sectors of the economy, 23 percent of the loan portfolio of Islamic banks falls on wholesale and retail trade, 17 percent of the manufacturing industry, and 15 percent of the loan portfolio falls on construction," he emphasized.
To note, the Eurasian Development Bank (EDB) Business Forum, which is taking place in Almaty, Kazakhstan, hosted the first session on "Islamic Finance in Central Asia".
The participants of the session discussed the fundamental principles of project financing in Central Asian states and considered related problems and mechanisms for their solution.
The segment of Islamic finance in the world's banking assets is, according to data for the beginning of 2024, 2 percent, but it is already $4 trillion, and it is growing rapidly. Indeed, the average annual growth rate of Islamic assets globally over 2015–2021 was 10.5 percent, compared to 5.8 percent among conventional financial assets.
Islamic banks have now gained a strong foothold in more than 40 countries and are beginning to compete effectively with classical credit institutions.
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