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The Eurasian Development Bank (EDB) and Dar Al Sharia entered into an agreement to implement Islamic finance principles and standards at the EDB.
Dar Al Sharia is a prominent consulting firm established in 2007 by Dubai Islamic Bank, the world’s first bank to operate under the principles of Islamic finance. As Sharia advisor, the company will assist in developing strategic approaches and customising the EDB’s policies and procedures. Pilot projects will also be designed to be funded under Sharia standards.
Conventional lending instruments (primarily investment and project finance) currently comprise over 80% of the EDB’s portfolio in its member economies. By 2026, the Bank expects to achieve greater diversification in its portfolio in terms of financial instruments employed.
All Central Asian governments pay special attention to the development of Islamic finance. Some countries have enacted legislation to establish the relevant finance segments such as banking and leasing. The Kyrgyz Republic has a rapidly growing microfinance sector. Overall, at the end of 2021, Islamic assets represented 0.2% of total banking assets in Kazakhstan, 1.5% in the Kyrgyz Republic and 1.1% in Tajikistan.
