BISHKEK, Kyrgyzstan, January 15. The share of Islamic financing assets in Kyrgyzstan had increased to about 1.47 percent of total banking assets by the end of September 2023, up from 1.36 percent at the end of 2022, Trend reports.
According to Moody's Investors Service, Kyrgyzstan has seen the fastest growth in Islamic financing in the CIS region in recent years. The country boasts the most advanced legal and regulatory frameworks for Islamic financing in the region at the moment.
Since 2011, Kyrgyzstan has had EcoIslamicBank, a fully-fledged Islamic bank. Additionally, four conventional banks have set up Islamic windows, gaining valuable experience in handling Sharia-compliant products. More banks are expressing interest in opening Islamic windows.
It was noted that several non-banking financial institutions in Kyrgyzstan offer Islamic services. There are four fully-fledged Islamic microcredit organizations and one Islamic leasing company. Two conventional microcredit organizations have also established Islamic windows.
Bakai Bank achieved a significant milestone in 2018 by launching the country's first Islamic window, the Islamic Finance Center. This center provides a comprehensive range of financial services adhering to Islamic banking principles. Financing at Bakai Bank grew by 95 percent year-on-year in the first nine months of 2023.
Furthermore, in 2022, three additional conventional banks obtained licenses to operate Islamic windows, contributing to the expanding landscape of Islamic financing in Kyrgyzstan.
According to Moody's, Kyrgyzstan's government has ambitious plans for the development of Islamic financing from 2022 to 2027. Key initiatives include introducing Islamic monetary policy instruments, establishing commercial Islamic banks, expanding Islamic windows in conventional banks, supporting deposit growth for Islamic financial institutions, introducing Islamic insurance options, and creating a state-level, independent Shariah supervisory board.
The Muslim population in Kyrgyzstan constitutes 6 percent of the total Muslim population in the CIS region. In the entire CIS region, there are currently four fully-fledged Islamic banks in operation: Al Hilal and Zaman Bank in Kazakhstan, Tawkhid Bank in Tajikistan, and EcoIslamicBank in Kyrgyzstan.
