Islamic finance assets in Central Asia are forecast to grow from $285 million in 2022 to $6.3 billion by 2033, with Kazakhstan and Uzbekistan leading the regional expansion due to high demand, population growth, and policy reforms.

Islamic finance in Central Asia is on the verge of major expansion, with projections showing a twentyfold increase in assets over the next decade. According to the Islamic Development Bank and the Eurasian Development Bank, the volume of Islamic financial assets in the region could grow from $285 million in 2022 to $2.5 billion by 2028 and reach $6.3 billion by 2033.

The forecast assumes that governments in the region will implement supportive legal and tax frameworks and promote public awareness of Islamic financial services.

Kazakhstan is expected to lead growth, leveraging strong infrastructure and recent policy efforts. Islamic banking assets in Kazakhstan are projected to reach $1.2 billion by 2028 and $3.3 billion by 2033. Sukuk (Islamic bonds) could total $1.3 billion by 2028 and $3.3 billion by 2033. The country has already approved a strategic development plan for Islamic finance and estimates potential retail demand for Islamic deposits at around $6.3 billion.

Uzbekistan, the region’s most populous country, is forecast to reach $1.1 billion in Islamic banking assets by 2028 and $2.4 billion by 2033. Sukuk volumes are expected to grow from $601 million in 2028 to $1.9 billion in 2033. The government is preparing to launch the Tashkent International Financial Center and integrate Islamic finance into its reform agenda, with plans to implement Islamic banking principles in at least three commercial banks by 2030.

Kyrgyzstan is targeting a 5% share for Islamic banking in its total financial sector. Although the current market share is just 1.5%, assets are forecast to grow to $58 million by 2028 and $67 million by 2033. Its sukuk market is expected to rise from $67 million to $170 million over the same period.

Tajikistan also shows strong potential, with forecasts indicating that Islamic banking assets will increase to $132 million by 2028 and $562 million by 2033. Sukuk assets are projected to rise from $57 million in 2028 to $155 million in 2033. Companies like Alif Bank and Tavhidbank are leading growth in the country.

Turkmenistan remains at an early stage. Although 93% of its population is Muslim, there are currently no Islamic financial institutions operating in the country.

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