Share of Islamic banks in total volume of Kazakhstan’s banking assets totals about $420M – official

ALMATY, Kazakhstan, June 27. The share of
Islamic banks in the total volume of banking assets in Kazakhstan
is 195 billion tenge ($419.2 million), the Deputy Chairman of the
Agency of the Republic of Kazakhstan on Regulation and Development
of Financial Market Olzhas Kizatov said, Trend
reports.
He made the remark during the session “Islamic Finance in
Central Asia” within the framework of the Eurasian Development Bank
(EDB) business forum in Almaty.
“The development of Islamic finance contributes to the increase
of financial inclusion and access to Islamic finance for broad
segments of the population that cannot use standard instruments.
Kazakhstan has created the necessary legislative framework for the
functioning of Islamic banks. To date, two Islamic banks are
operating in Kazakhstan. As of May 1, 2024, the share of Islamic
banks in the total volume of bank assets amounted to 195 billion
tenge,” he noted.
According to him, for the development of Islamic finance in
Kazakhstan, increasing competition in the banking sector, and
expanding the volume of lending to the economy, it is planned to
establish the possibility of the implementation of Islamic finance
by classical universal banks within the framework of “Islamic
windows”.
“Islamic banks in Kazakhstan are mainly engaged in lending to
the corporate sector. In terms of sectors of the economy, 23
percent of the loan portfolio of Islamic banks falls on wholesale
and retail trade, 17 percent of the manufacturing industry, and 15
percent of the loan portfolio falls on construction,” he
emphasized.
To note, the Eurasian Development Bank (EDB) Business Forum,
which is taking place in Almaty, Kazakhstan, hosted the first
session on “Islamic Finance in Central Asia”.
The participants of the session discussed the fundamental
principles of project financing in Central Asian states and
considered related problems and mechanisms for their solution.
The segment of Islamic finance in the world’s banking assets is,
according to data for the beginning of 2024, 2 percent, but it is
already $4 trillion, and it is growing rapidly. Indeed, the average
annual growth rate of Islamic assets globally over 2015–2021 was
10.5 percent, compared to 5.8 percent among conventional financial
assets.
Islamic banks have now gained a strong foothold in more than 40
countries and are beginning to compete effectively with classical
credit institutions.
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