The Dynamics of Islamic Finance in Kazakhstan: Exploring Opportunities and Addressing Challenges
(1) Department of Islamic Economics, Allama Iqbal Open University (AIOU), Islamabad, Pakistan
(2) Kazakh-British Technical University, Almaty, Kazakhstan
(3) University Institute of Management Sciences PMAS-Arid Agriculture University Rawalpindi, Pakistan
(*) Corresponding Author
Abstract
Introduction: This paper explores the burgeoning field of Islamic finance in Kazakhstan, highlighting the opportunities and challenges that lie ahead. Islamic finance, which adheres to Sharia law, provides a distinct alternative to conventional banking systems. As Kazakhstan seeks to diversify its financial sector and attract investments from Muslim-majority countries, understanding the dynamics of Islamic finance becomes crucial. This study examines the legislative framework, market potential, key players, and the socio-economic implications of Islamic finance in Kazakhstan. The case study of existing Islamic banks is given, and their financial performance is examined.
Methods: This research employed a qualitative approach, incorporating a literature review and descriptive-exploratory analysis. Primary data were obtained from academic literature, official reports from international financial institutions, Kazakh government regulations, and publications related to the development of Islamic finance in Central Asia. Data analysis techniques included reduction, categorization, and thematic interpretation to identify the dynamics, opportunities, and challenges associated with the implementation of Islamic finance in Kazakhstan. This approach was chosen to provide an in-depth understanding of the actual conditions and prospects of Islamic finance, while also generating strategic recommendations for the development of the industry at the national and regional levels.
Results: The research paper also highlights the obstacles faced by the Islamic finance sector and the potential for expanding its implementation.
Conclusion and suggestion: The paper further recommends solutions for integrating Islamic finance into Kazakhstan’s economy.
Keywords
Full Text:
PDFReferences
Ahmad, A. U. F., & Hassan, M. K. (2019). The impact of Islamic finance on economic growth: An empirical evidence from Southeast Asia. Journal of Islamic Accounting and Business Research, 10(3), 384–398.
AIFC & CSQLaw. (2024, March). Market research. AIFC. https://aifc.kz/wp-content/uploads/2024/07/1.3-islamic-finance-kazakhstan-market-analysis-final-_-eng.pdf
Alshater, M. M., Saba, I., Supriani, I., & Rabbani, M. R. (2022). Fintech in islamic finance literature: A review. Heliyon, 8(9). https://doi.org/10.1016/j.heliyon.2022.e10385
Budi, B. S., & Faizin, M. (2024). The effect of macro economic variables on stock returns of the Jakarta Islamic index: A panel vector error correction model approach. Etihad: Journal of Islamic Banking and Finance, 4(1), 1–16. https://doi.org/10.21154/etihad.v4i1.9019
Beck, T., Demirguc-Kunt, A., & Merrouche, O. (2013). Islamic vs conventional banking: Business model, efficiency and stability. Journal of Banking & Finance, 37(2), 433–447.
Damak, M., Roy, D., Jagtiani, S., & Young, B. J. (2022). Islamic finance 2022-2023: Same constraints, new opportunities. S&P Global. https://www.spglobal.com/ratings/en/research/articles/220606-islamic-finance-2022-2023-same-constraints-new-opportunities-12398808
Domat, C. (2024). Islamic finance: Just for Muslim-majority nations? Global finance. https://gfmag.com/banking/islamic-finance-just-muslim-majority-nations/#:~:text=Today%2C%20the%20UK%20boasts%20five,sharia-compliant%20funds%20are%20domiciliated
Gresh, G. F. (2007). The rise of Islamic banking and finance in Central Asia. The Fletcher School Online Journal for Issues Related to Southwest Asia and Islamic Civilization, 1–10.
Hasan, M., & Dridi, J. (2010). The effects of the global crisis on Islamic and conventional banks: A comparative study. IMF Working Papers, 2010(201), 1–46. https://doi.org/XXXX
Hasan, S., & Mohamed, S. (2024). Navigating uncertainty: Global Islamic finance assets to exceed $6.7 trillion by 2027. LSEG. https://www.lseg.com/en/insights/data-analytics/navigating-uncertainty-global-islamic-finance-assets-expected-to-exceed-67-trillion-by-2027
ICD-LSEG. (2023). Islamic finance development report 2023: Navigating uncertainty. LSEG Data & Analytics. https://solutions.lseg.com/IslamicFinance_ICD_LSEG
Atah, U. I., Nasr, W. M. A., & Mohammed, M. O. (2018). The role of zakat as an Islamic social finance towards achieving sustainable development goals: A case study of Northern Nigeria. In E-Proceedings of the Global Conference On Islamic Economics And Finance.
Kammer, M. A., Norat, M. M., Pinon, M. M., Prasad, A., Towe, M. C. M., & Zeidane, M. Z. (2015). Islamic Finance: Opportunities, Challenges, and Policy Options.
Kuran, T. (2004). Islam and Mammon: The economic predicaments of Islamism. Princeton University Press.
Mohammed, N. A., & Muhammed, N. A. (2017). Islamic finance development and its impact on economic growth: Evidence from GCC countries. International Journal of Economics and Financial Issues, 7(3), 91–98.
National Bank of the Republic of Kazakhstan (NBRK). Chronicle of the development of Islamic finance in Kazakhstan. NBRK. https://nationalbank.kz/en/page/hronika-razvitiya
Ponziani, R. M. , & Mariyanti, T. (2020). Islamic bank and monetary policy: The case of Indonesia. International Journal of Islamic Economics and Finance (IJIEF), 3(1), 121–142. https://doi.org/10.18196/ijief.2124
Sakenova, S. (2023). Kazakhstan’s economic growth to reach 5% at year-end. Astana Times. https://astanatimes.com/2023/12/kazakhstans-economic-growth-to-reach-5-at-year-end/
Salikhova, A. (2016). Banking law and implementation of Islamic banking in Kazakhstan. Journal of King Abdulaziz University: Islamic Economics, 29(2), 1–18. https://iei.kau.edu.sa/Files/121/Files/153873_29-02-11-Alfiya.pdf
Salman, S. A., & Nawaz, H. (2018). Islamic financial system and conventional banking: A comparison. Arab Law Quarterly, 32(4), 367–385. https://doi.org/10.1016/j.aebj.2018.09.003
Shah, D. & Rehman, S.M.A. (2015). Governing principals of Shari’ah: A study of Islamic business transactions for contemporary practices. Al-Azhāar Special Edition, 1(2), 158–170.
Shah, M.A.R. Raza, K. & Alazhari, M.A. (2018). An introduction to monetary policy framework ofpakistan: Instruments, objectives, and mechanism. Pakistan Journal of Economic Studies, 1(2), 111–129.
Shah, S.M.A.R. & Rashid, A. (2020). Impacts of monetary policy on credit supply of Islamic banks: An empirical study of Pakistan versus Malaysia. In Islamic Monetary Economics (169–194), Routledge.
Shah, S.M.A.R., Farooq, M.U. & Akmal, M. (2021). Embracing Islamic banking as a new engine toward economic growth. In Contemporary Issues in Islamic Social Finance (169–184), Routledge.
Sharpe, S.A. (1995). Bank capitalization, regulation, and the credit crunch: A critical review of the research findings. Board of Governors of the Federal Reserve System, Finance and Economics Discussion Series, 12(1), 95–20.
Siddique, M.A. (2017). Practice of running mushārakah in Pakistani Islamic banks: An analytical study in the light of Sharīʿah principles. Fikr-O-Nazar, 54 (4), 53–110.
Widarjono, A., Wijayanti, D., & Suharto, S. (2022). Funding liquidity risk and asset risk of Indonesian Islamic rural banks. Cogent Economics and Finance, 10(1), 1–14. https://doi.org/10.1080/23322039.2022.2059911
ZicoShariah. (2020). Islamic finance masterplan for the Republic of Kazakhstan 2020-2025. AIFC. https://bc.aifc.kz/files/pages/721/documents/1/islamic-finance-master-plan-for-the-republic-of-kazakhstan-2020-2025.pdf
DOI: 10.70095/alamwal.v17i2.21931
Article Metrics
Abstract view : 9 timesPDF - 1 times
Refbacks
- There are currently no refbacks.
Indexed by:
Mailing Address:
Department of Sharia Banking, Faculty of Islamic Economics and Business, UIN Siber Syekh Nurjati Cirebon
Jl. Perjuangan By Pass Sunyaragi Kesambi Kota Cirebon
E-Mail: journal.alamwal@gmail.com
Al-Amwal: Jurnal Ekonomi dan Perbankan Syariah is licensed under a Creative Commons Attribution 4.0 International License