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CIS as the next frontier for Islamic Banking, per Moody’s report

PUBLICATIONS / Articles / 2019 / CIS as the next frontier for Islamic Banking, per Moody’s report
Global rating agency Moody’s projects that the Islamic banking sector in the Commonwealth of Independent States (CIS) countries will experience growth thanks to government-driven initiatives to develop this industry.

Amongst the CIS countries, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan will be at the forefront of this growth, with Kazakhstan and Kyrgyzstan set to experience the strongest potential for high growth.  

The region’s finance industry based on Shariah principles remains underdeveloped, despite a sizeable Muslim population. Ever since the Development Bank of Kazakhstan issued USD 76 million worth of five-year sukuk, a first in the region, there have been no other offerings to date. 

Should Islamic banking become more mainstream within the CIS states, it can be expected to promote investment ties amongst the region with growing economies in the Arab world and also Asia with larger Muslim population and untapped capital with demand for Shariah-compliant financing and services. 

However, government-led plans would need to address the existing regulatory disadvantages to the domestic banking system and weak public awareness, in order for Islamic banking to truly grow and prosper in the region. 

 

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