BAKU, Azerbaijan, January 15. Developing Islamic financing isn't a key priority for Azerbaijan because its focus is on building a secular economy with sufficient revenue from oil and gas exports, Trend reports via Moody's report on Islamic financing in the Commonwealth of Independent States (CIS).
The report noted that Islamic financing has good potential for growth in the CIS region; however, establishing related regulations and laws and increasing public awareness will take time, which will limit the sector's growth in the foreseeable future.
"Despite potential, the development of Islamic financing will take time as regulatory frameworks and public awareness evolve slowly. Islamic financing in the CIS region has ample growth potential, underpinned by the presence of large, young, and economically active Muslim populations in Central Asian countries and Azerbaijan. However, growth in Islamic financing in the CIS is likely to remain subdued in the foreseeable future because establishing related laws and regulations and increasing public awareness will require significant work," the report explained.
The International Bank of Azerbaijan'shut' the country's sole 'Islamic window' in 2015, the Moody's report said.
In September 2023, Azerbaijani Rabitabank and the International Islamic Trade Finance Corporation (ITFC) signed a $10 million letter of credit contract.
"This historic agreement, the first of its kind in Azerbaijan, will play an important role in promoting Sharia-compliant trade finance in the private sector," the bank said.
Currently, ITFC is exploring opportunities to expand Islamic finance transactions in Azerbaijan.