Algiers (TDI): A new report co-published by the Eurasian Development Bank (EDB), the Islamic Development Bank Institute, and the London Stock Exchange Group forecasts robust growth for Islamic finance in Central Asia.
Titled “The Future of Islamic Finance in Central Asia,” the report was unveiled at the 2025 Annual Meetings of the Islamic Development Bank Group in Algiers, Algeria.
The study offers an overview of the Islamic finance landscape across Kazakhstan, Tajikistan, Turkmenistan, Kyrgyzstan and Uzbekistan.
While Sharia-compliant financing remains a relatively recent addition to the international financial system, having developed over the past three decades, it is becoming an increasingly important component in the sustainable development strategies of Central Asian economies.
All five countries are reportedly prioritizing the expansion of Islamic finance.
As of early 2024, the region is home to eighteen Islamic banks and fourteen non-bank financial institutions, including Islamic banking windows.
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The sector also features takaful (Islamic insurance) operators, microfinance institutions, Ijara (leasing) companies, and emerging Islamic FinTech ventures like digital banks and wealth management platforms.
Total Islamic finance assets in Central Asia were recorded at $699 million at the start of last year.
According to the Islamic Finance Development Report 2024, Kazakhstan positioned 19th internationally in terms of Islamic finance development, above the global average, and leads the regional market.
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Projections in the report anticipate substantial development. Islamic banking assets in the region are likely to rise to $2.5 billion by 2028 and $6.3 billion by 2033.
Kazakhstan is predicted to remain the regional leader, followed closely by Uzbekistan, buoyed by favorable demographics, economic growth, and the depth of national banking sectors.
The sukuk (Islamic bond) market is also set for rapid expansion. Baseline forecasts suggest sukuk issuance could hit $2.05 billion by 2028 and $5.6 billion by 2033.
