Introducing Islamic Financing in the States of Central Asia: Strategies, Institutions and New Experiences

This article aims to gather new information on the current state of development in Central Asian states' attempts to introduce and facilitate Islamic financing. Using material from recent field research in Kazakhstan and Kyrgyzstan, the paper outlines the rationale behind governments to undertake first steps in this direction, highlighting the role of the financial crisis in this regard. It continues to provide a first structural comparison of the institutional setting in the countries to regulate Islamic Banking. The role of national banks, major state strategies, laws adopted and an overview of the main actors in Islamic Financing will form part of this section.

The paper concludes with describing the main activities that have been undertaken by Islamic financing agencies in Central Asia, for example a first sukuk issue in Kazakhstan or Islamic micro-financing in Tajikistan and Kyrgyzstan. With its description of institutions and policies in the states of Central Asia, the paper fills a gap in the literature, where Islamic financing has been either studied with a different regional focus (Middle East, Malaysia) or only in terms of the actions of the Islamic Development Bank.