The report makes practical recommendations and strategic considerations tailored to the specific dynamics of the region
ALGIERS, Algeria, May 20, 2025/APO Group/ --
The Eurasian Development Bank, the Islamic Development Bank Institute (www.IsDBInstitute.org) and the London Stock Exchange Group have published a joint research on the future of Islamic finance in Central Asia. The joint research was presented at the 2025 Islamic Development Group’s Annual Meetings in Algiers, Algeria.
Eurasian Development Bank, Islamic Development Bank Institute and London Stock Exchange Group Publish New Report on the Future of Islamic Finance in Central Asia
Islamic Finance market Outlook for Central Asia
This report provides a comprehensive analysis of the current status and prospects of Islamic finance globally and in Central Asia, comprising Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The report makes practical recommendations and strategic considerations tailored to the specific dynamics of the region, addressing regulatory harmonisation, capacity building, product innovation, and awareness campaigns. The research demonstrates that the region offers a unique opportunity for the growth of Sharia-compliant financial products and services, due to its rich cultural heritage, significant Muslim population, and rising demand for investments.
The region of Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) is dynamically changing, and its role in Eurasia and the world needs to be reassessed. The population of Central Asia is 80 million people. This is a 40% increase since 2000. It keeps growing at 2% per year. In 2024, the aggregate GDP of the Central Asia countries was $519 billion). Over the last two decades, it grew nominally at 6.4% on average. Foreign trade turnover has increased almost ninefold since 2000. Foreign direct investments have increased 17 times. For over 20 years, Central Asia has been growing faster than developing countries on average.
Sharī‘ah-compliant financing, as a relatively new (more than 30 years old) and fast-growing segment of the global financial system, plays an increasingly important role in the sustainable development of the Central Asian states. All governments of the region are paying special attention to the development of Islamic finance. Islamic finance offers a unique opportunity for Central Asia to promote inclusive growth, financial stability, and sustainability. Overcoming challenges such as regulatory inconsistencies and talent shortages will require coordinated efforts and innovative solutions. By capitalizing on its strategic advantages, the region can position itself as a key player in the global Islamic finance industry.
The region of Central Asia currently has 11 Islamic banks and 11 non-banking financial institutions, as well as Islamic banking windows. Other institutions include takaful operators, microfinancing, investment companies, Ijara or leasing companies, and Islamic FinTechs such as digital banks and wealth management platforms. Islamic capital market instruments such as ṣukūk are developing more slowly than Islamic financial institutions, however.
Islamic finance assets in Central Asia amount to USD 699 million at the beginning of 2024. According to the Islamic Finance Development Report 2024, Kazakhstan ranks 19th in the world in terms of Islamic finance development in 2024 (i.e. above the global average) and leads the Central Asian market.
In the next ten years, there is a perspective for significant growth and development in the Islamic finance industry in the region, driven mainly by the Islamic banking sector and the ṣukūk asset class (Energy, Transport & Logistics, Industry, Food Security and Social Infrastructure are priority areas of investment). A baseline scenario based on the growth of financial intermediation and an estimate of the change in the share of Islamic finance in the financial sector structure was used to project the increase in Islamic finance assets in the region.
This approach assumes an increase in Islamic banking assets in Central Asia to the level of USD 2.5 billion in 2028 and USD 6.3 billion in 2033. Given the favourable demographics, strong economic growth, and the substantial size of the banking industry in each of the five Central Asian nations, Kazakhstan is expected to be the leader, followed closely by Uzbekistan. The region’s Ṣukūk market is also expected to witness significant expansion: the baseline forecasts suggest that Ṣukūk market is anticipated to grow to USD 2.05 billion by 2028 and USD 5.6 billion by 2033.
The Islamic finance industry faces challenges such as lack of standardisation, and the need for robust risk management frameworks. For that reason, regulatory harmonisation across Central Asian countries is crucial to attract foreign investment and facilitate cross-border transactions.
The report stresses the need for cooperation of the multilateral financial institutions and International Islamic banks on creating Sharia-compliant products and services tailored to the specific needs of Central Asian markets, including development of “Islamic windows” in conventional financial institutions as a sustainability milestone and innovative solutions for microfinance, agriculture financing, and renewable energy financing. International Islamic banks from more mature Islamic finance jurisdictions such as the Gulf countries and Southeast Asia can help build capacity in Central Asian Islamic banking ecosystems and can enable knowledge transfers in Central Asian countries to enhance the levels of Islamic finance technical expertise they can draw upon.
“One of the EDB's strategic priorities is to become a platform for Islamic finance in Central Asia. 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, EDB has started to develop an “Islamic Window” for financing projects in accordance with Sharia principles. The priority areas of investments will be energy, transport, social infrastructure, food security and industry”, says Mr Nikolai Podguzov, EDB Chairman.
In a message published in the report, Chairman of the IsDB Group, H.E. Dr. Muhammad Al Jasser, said, “The Islamic Development Bank Group is committed to supporting the advancement of Islamic finance in Central Asia and beyond. Our collaboration with Eurasian Development Bank demonstrates how development banks can work together to create inclusive and resilient financial systems.”
The report concludes that Islamic finance holds immense potential to contribute to economic development, financial inclusion, and foster good governance practices in Central Asia. By capitalizing on the region's unique opportunities and addressing existing challenges through collaborative efforts, Islamic finance can emerge as one more source of sustainable growth and prosperity in the region.
The report “The Future of Islamic Finance in Central Asia” is accessible on IsDBI website here: https://isdbinstitute.org/product/future-of-islamic-finance-in-central-asia/
Distributed by APO Group on behalf of Islamic Development Bank Institute (IsDBI).
It will be a waste of time to wage a war on Al Shabaab. Because they just want an excuse to be aggravated. What we need is to be vigilant and not complacent at all times.
it should be a war on all aspects: political, military, intelligence, media and most importantly ideology. Islam has a name for these kind of people: Khawarij and the prophet has called to fight them so it is a MUST not a choice to fight these people but does Riyale has what it takes for this war? I doubt that very much
Mr Riyale, I can understand to fight Shabab there is political gains but look the big picture. Instead of calling them to attack Somaliland, why don’t you ask these questions:
a)Why Alshabab attacked us.
b)If one decided to fight them would be otherway to fight them rather than guns.
c)Either you are with us or against us doesn’t work and to fight them you should understand why are they fighting for.
Somaliland doen’t have the power and the economical to fight Shabab and Ethopia who are better train than us were force to leave Somalia by the International Community and daily attacks from Shabab.
Shabab doen’t want to attack Somalis but those who they think collabroted with their enemy whom ever they are.
Don’t forget Shabab was also part of these who defeated Somali warlords.
I am not shabab supporter in anyway but I also know they are Somali brothers who see things differently than i do. Somaliland doen’t need war with anyone including Shabab but only defend itself if attack.
Mr. Riyale you were very lucky when Shabab easily came to your office and they can do this in the future so stop attracting them. Somaliland wouldn’t save you from Shabab so becareful what you wish for.
Your energy should be on election and how to stop Somaliland youngers from joing Shabab and ask the United Nation to help us to creat jobs for them eventhough they don’t recognized us.
Shabab had already declared war on S/Land. S/Land has only one option – to fight back by all means and ensure that Shabab is defeated permanently.
a)Why Alshabab attacked us? – There is no justification to commit suicide to kill innocent people. They will be dragged to hell fire (Jahanam) in the day of judgment.
b) -It is all out war and there will be no mercy.
c) – Either they stop shedding Muslim blood or they will be exterminated.
-Somaliland is not Ethiopia. We are Somalis, and we know each other very well. Shabab or like will not dare to face Somaliland.
– Are you kidding?! Of course you are shabab advocate.
– Mr. Riyale will die only when Allah say so, not the so called Shabab.
– Security first, everything else second.
Al shabab can not win a military war againest Somaliland but It can win an Ideology war againest Somaliland if we let our guard down, we have to be vigilant and make sure no Somalilander who truely believe in Islam will ever believe this group who are truely anti Islam and againest our believe. We should fight them in every schools and mosques so they do not get any footing in Somaliland.
The other think we all have to know they never believe in Somaliland existance and in this regards they do have a lot in common with our enemy where ever they are.
Please, be vigilant againest the internal enemies these are the enemies who are hard to Identify than the external enemies.
Long live Somaliland and it's people!
No one has the rights to take another person is life either the person is Muslim or non-Muslim. Yes, some of the Shabab actions had taken innocent lives and they will be judge in the court of Allah.
No one has the power to decide who will go to Jana or Jahanaba. Allah is forgivable and you can’t 100% sure if Shababs would go to jahanaba. Alshabab doesn’t like Somaliland for two reason:
a) We are too close to Ethopia that they consider their enemy.
b)Our system is democracy they also consider that the western idea. Those Somalis in Somalia know more about Shabab than we do but they couldn’t defeat them with the help of Ethopia.
c) We give away business people who has nothing to do with political to Ethopia because Ethopia think they are ONLf.
I say again that the only way Somliland can fight them is to keep its younger citizen from Shabab. By doing that you cutting of Shabab from local supporters and attacking the source of the problems. We don’t want to invite Shabab to our land by declaring war that has no value but take the lives of Muskiin Somalis.
Yes anyone can go for good when Allah wants him or her to go but you don’t sleep in the middle of Highway and argue you will die when your time is up. I have no fate that Mr. Riyale would be safe in the Hands of Somaliland security force. I’m sorry but S.land Security force fail to capture Dadqalato;therefore, this is frienly advise for Mr. Riyale to protect himself from those who want to get rid off him including Shabab.
Don’t get upset, it all about idea.
We are 100% sure that shabab suiciders are going to Jahanam.
وكذلك جعلناكم امة وسطالتكونو شهداء على الناس ويكون الرسول شهيدا عليكم.
I'm in USA and trying to study Somali anarchy as a positive event. Watching the "transitional government" which seems supported only by outside intruders like our USA bothers me greatly, as we watch our government succumb to rulers.
From what I have learned thus far, it seems that much of the Somali troubles with Islam groups is from also caused by outside interference. I am just trying to learn.
That is true. If you remove the outside factor, shabab or like will not have a place in the Somali society and they will simply become nobody. As Somalis we know each other very well. Every one belongs to a clan. Nobody will dare to fool around in other clan's territory. In short, everybody will go back to his clan and the so-called shabab will cease to exist.
Thank you Ahmed, you show very good sense. In anarchy, no matter where, people soon learn to protect those within their circle, and not to intrude on another circle (or clan, or family). That seems to drive those with governments nuts, because they have no clue how they might "control" a land without a government.
However, now Somali-land has in some way (I'm not yet sure just how or why or how effectively, still researching) created another government. Also the UN has just declared all of Somalia to be under some interim UN government.
The trouble with all governments throughout history has been that they function only thru their supposed right to "Force", and always that force increases until finally the people get rid of those Rulers and sadly, they eventually start all over with another.
My premise holds that humanity must learn somehow to live without force, which means either anarchy or a completely voluntary system which cannot "govern'.
I'll watch for your further response. Thank you.
Without question, Somali societies are anarchy and they were that way for so many centuries. But the clan has been the center of gravity and control. Individuals are taught and raised to avoid actions that may bring shame to the clan or family. Other than that, they were free to express themselves and run there day to day life. Even when war brakes between clans, there was and still traditional rules that govern the behavior of warring parties: Children, women and elders could not be harmed.
In reality, the concept of government under which all Somalis to unite was an outside idea.
In modern Somaliland we recognize the positive role of the clan in the stability and security of society. All clan are represented in the house of elders, the Guurti (Which is the highest authority in the country). Also, until today individuals avoid any actions that may bring shame to their clan. On the other hand, everyone agrees to have a government that can establish basic law and order.
I'm a young somalilander and minnesotan. I believe our qwest for somaliland recognition failed terribly and further pursuit is waste of time, energy, and money.
A lot of young somalilanders believe that we ought to change our strategy and come up with new creative idea. It is clear that southerners are are going to be in the current mess for the forseeable future and we (somaliland) will not achieve recognition until Somalia is lawless. That is what we have to understand without delusioanal. Many somalilanders believe that Godane is the last hope for both somaliland and Somalia.
A lot of young people believe Godane is the Mahdi of somali people in the 21st century and muslims in the horn in general. many beleive he is Ahmed Gurey of our time who will save the somali race and muslim religion and somali integrity. He already gave Ethiopian a lasting lesson by forcing them to withdraw. A lot of young s/landers believe our son is a hero. That's just my opinion. it doesn't mean I'm advocate for him or his organization!
My Dear Friend
The Somaliland quest for recognition did not fail. On the contrary, the quest has reached at very advanced stage. We are at stage that we have convinced the world that following Somaliland model is the only way to reach lasting peace and stability in Somalia. Another important factor is that the majority of Somalia population respect Somaliland and its people and most of them believe that Somaliland is the only hope for Somali race. For example, you will find in Hargeisa Somalis from all corners of Somalia who want live in Somaliland because of peace and civility. On the other hand, you are right, we need new strategy, creative ideas and out of the approach to reach our goal of attaining the recognition of international community.
Godane or like is not and will not be the hope of Somaliland. Because he is not moderate Muslim. Islam is teaching us love, mercy and humanity, justice, fairness, decency. Allah said in the Quran to Prophet Mohammed (PBUH) "We have only sent you to be mercy to mankind" As a Muslim, my mission in this world is to follow the mission of prophet Mohammed, that is to be mercy to mankind, to be fair and to spread peace and love in my community and in my world.