BISHKEK, Kyrgyzstan, November 22. Aiyl Bank and the Guarantee Fund OJSC have signed a cooperation agreement to broaden access to Islamic financing for entrepreneurs, particularly small and medium-sized businesses in regional areas, Trend reports via the bank.
Under the agreement, the Guarantee Fund can cover up to half of a client’s liabilities, allowing businesses with limited collateral to access financing. The funds are provided according to Islamic principles, using interest-free trade and partnership-based contracts.
Islamic finance, operating on Sharia principles, differs from conventional banking by strictly prohibiting riba (interest), which is achieved through the use of contracts based on trade (e.g., Murabaha) and profit/loss sharing (e.g., Mudarabah or Musharakah). Globally, this sector shows stable growth, with the assets of Islamic financial institutions worldwide exceeding $2.5 trillion, with the Gulf countries and Southeast Asia being the key hubs.
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