ALGIERS, Algeria, May 20. Kazakhstan’s Islamic banking sector is projected to grow to $3.3 billion by 2033, reads the joint report of the Eurasian Development Bank, the Islamic Bank Institute and the London Stock Exchange Group.
It was presented during the IsDB annual meetings in Algiers, Trend’s special correspondent reports.
“The two sectors most likely to drive Kazakhstan’s Islamic finance industry forward are Islamic banking and Ṣukūk. Given this as well as the recent initiatives towards developing the industry, the prospects for the industry’s development, as well as the high demand for Islamic finance products (AIFC, 2024a), the country’s Islamic banking sector is projected to grow to $1.2 billion by 2028 and $3.3 billion by 2033 under the baseline scenario. For the Ṣukūk asset class – which is more active as more sovereigns and corporates have issued Ṣukūk globally over the past few years, something which Kazakhstan could observe and learn from – its total value is projected to reach $1.3 billion by 2028 and $3.4 billion by 2033,” reads the report.
The authors point out that although the Islamic banking sector
accounted for less than 1% of total banking industry assets at the
end of 2023, the country is building on strong foundations to
develop its Islamic finance industry, as can be seen by the
introduction of the Islamic Finance Master Plan for the
Republic
of Kazakhstan 2020-2025 prepared for the AIFC with technical
assistance from the IsDB (AIFC,
2020).
“Developing the Islamic banking sector is expected to strengthen the country’s domestic financial system by mobilizing locally available liquidity, in line with the government’s aim to develop a market-driven rather state-supported economy. The key pillars covered under the Master Plan include the internationalisation of the AIFC; Islamic banking; an Islamic capital market; takāful; Islamic non-banking institutions; Islamic social finance; FinTech; the Ḥalāl sector; and Islamic finance education and training,” the report reads.