Islamic Finance Industry in Kazakhstan: Then and Now
DOI:
https://doi.org/10.26577//EJRS.2022.v29.i1.r8Keywords:
Islamic finance, Kazakhstan, challenges, legal framework, master planAbstract
Kazakhstan is the first Central Asian State to have established the Islamic finance sector and introduced its legal and regulatory framework. This article reviews the history and development of Islamic finance in the Republic of Kazakhstan. The first section outlines the events and experiences of this industry chronologically, and examines it historically. The second section scrutinizes laws on Islamic financing and amendments hereto, considers the various institutional initiatives, and critically analyses the implementation of the Islamic finance master plan. The research assessed the effectiveness of Kazakhstan’s Islamic finance master plan of 2012-2020 and analyzed the content of the new master plan of 2020-2025. The findings suggest that Kazakhstan’s Islamic finance market has not grown to date as expected despite numerous reforms and measures aimed at developing the industry. The research also revealed the following major challenges impeding its growth: 1) a weak legal and regulatory framework; 2) tight regulations inhibiting the incorporation of Islamic financial institutions; 3) a dearth of Islamic finance experts; 4) a low public awareness of the Islamic financial products. Hence, taking the proper measures to address these challenges is crucial for the growth of Islamic finance industry in Kazakhstan.
Keywords: Islamic Finance, Kazakhstan, Challenges, Legal Framework
References
References
Алиева Б. (2016) Роль исламского финансирование в Казахстане. – Алматы: Вестник КазНУ. Серия Экономическая. № 2 (114). – 201-204.
Байдаулет Е., Салихова А., Кашимова Л. (2014) Основы этических (исламских) финансов. – Павлодар: PrimaLux. – 325.
Беккин Р. (2010) Исламская экономическая модель и современность. – Москва: Издательский дом Марджани. – 316.
Гриднева Е., Сарыбаева Г. (2019) Возможности развития исламских финансов для экономики Казахстана. – Алматы: Вестник университета Кайнар № 2.1. – 24-28.
Исхаков И. (2010) Опыт Республики Казахстан в привлечении исламского банковского капитала. – Татарстан: Научные труды ЦПЭИ. Экономика. – 74-80.
Национальный Банк Казахстана (2017) Хроника развития исламского финансирования в Казахстане. Электронный ресурс: https://www.finreg.kz/document/?docid=4680&switch=rus
О внесении изменений и дополнений в некоторые законодательные акты Республик Казахстан по вопросам организации и деятельности исламских банков и организации исламского финансирования (2009) – URL https://adilet.zan.kz/rus/docs/Z090000133_О внесении изменений и дополнений в некоторые законодательные акты Республики Казахстан по вопросам страхования и исламского финансирования (2015) – URL https://adilet.zan.kz/rus/docs/Z1500000311
Постановление Совета Министров Казахской ССР (1990) Электронный ресурс: https://adilet.zan.kz/rus/docs/P900000472_
Рыскулов А. (2010) Исламское Страхование (Такафул): 5 ключевых принципов. – Алматы: Региональный Финансовый Центр города Алматы. – 1-7.
Шуптыбаева Д. (2014) Қазақстандағы Исламдық Қаржыландыру. – Нұр Сұлтан: ҚазЭҚХСУ жаршысы, № 4. – 106-112.
References
AFR (n.d.) – The website of The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market. Available at: https://www.gov.kz/memleket/entities/ardfm/press/news/details/254186?lang=en
AIFC (2020) Al Rayan Investment LLC is working on a process to establish a fully-fledged and digital bank in the Astana International Financial Centre. Available at: https://aifc.kz/press-relizy/al-rayan-investment-llc-a-wholly-owned-subsidiary-of-masraf-al-rayan-qpsc-is-working-on-a-process-to-establish-a-fully-fledged-and-digital-bank-in-the-astana-international-financial-centre-aifc/ [Accessed on: 14 December 2021].
Al Saqr Finance. (n.d.) Our team. The website of JSC Al Saqr Finance. Available at: https://alsaqr.kz/ [Accessed on: 5 October 2020]
Alieva B. (2016) Rol' islamskogo finansirovanie v Kazahstane [The role of Islamic Finance in Kazakhstan]. – Almaty: Vestnik KazNU. Serija Jekonomicheskaja. № 2 (114). – 201-204. (in Russian)
An interview conducted by authors (2019) An interview with Janturin Aidar, Business Development Officer at Astana International Financial Center. At: 17th October 2019. – Nur Sultan.
An interview conducted by authors (2019) An interview with Kuralay Yeldesbay, the Chairman of the Board of Association of Islamic Finance Professionals. At: 24th October 2019. – Nur Sultan.
ARDFM (n.d.) The Legislative framework. Available at: https://finreg.kz/?docid=783&switch=english
Baidaulet Y. (2019) Chronology of Islamic Finance in Central Asia: Kazakhstan. – Islamic Finance news, Vol. 16. Issue 19. 15th May 2019. – 21-22.
Baidaulet Y., Salihova A., Kashimova L. et.al. (2014) Osnovy jeticheskih (islamskih) finansov [Basics of ethical Islamic financing]. – Pavlodar: PrimaLux. – 325. (in Russian)
Bekkin R. (2010) Islamskaja jekonomicheskaja model' i sovremennost' [Modern Islamic Economic Model]. – Moskva: Izdatel'skij dom Mardzhani. – 316. (in Russian)
BTA (08.05.2007) Bank Turan Alem JSC USD 250 000 000 Syndicated Wakala restricted with Commodity Murabaha Financing Facility. – The website of BTA bank. Available at: http://bta.kz/en/press/news/2007/07/12/226/ [Accessed on: November 7, 2020]
BTA (12.07.2007) JSC “Bank Turan Alem” and Emirates Bank Group agree on mutual cooperation. – The website of BTA bank. Available at: http://bta.kz/en/press/news/2007/05/08/237/ [Accessed on: November 7, 2020]
Gridneva E., Sarybaeva G. (2019) Vozmozhnosti razvitija islamskih finansov dlja jekonomiki Kazahstana [Opportunities for the development of Islamic Finance for the Economy of Kazakhstan]. – Almaty: Vestnik universiteta Kajnar № 2.1. – 24-28. (in Russian)
ICD-Refinitiv (2021) Islamic Finance Development Report 2020. – Available at: https://icd-ps.org/uploads/files/ICD-Refinitiv%20IFDI%20Report%2020201607502893_2100.pdf
IFDI Refinitiv Thomson Reuters (2020) Islamic Finance Development Indicator 2020. Available at: https://apac1.apps.cp.thomsonreuters.com/web/Apps/IFDI [Accessed on: November 8, 2020]
IsDB. (n.d.) IsDB Group Interactive Map. – The website of IsDB. Available at: https://www.isdb.org/projects/map [Accessed on: November 7, 2020]
Iskhakov I. (2010) Opyt Respubliki Kazahstan v privlechenii islamskogo bankovskogo kapitala [Experience of Republic of Kazakhstan in attraction an Islamic Banking Capital]. – Tatarstan: Centr perspektivnyh jekonomicheskih issledovanij. Jekonomika. – 74-80. (in Russian)
Khaki, G., Malik B. (2013) Islamic Banking and Finance in Post-Soviet Central Asia with Special Reference to Kazakhstan. – Journal of Islamic Banking and Finance. Vol. 1. No. 1. December 2013. – 11-22.
KIC (n.d.). About us. The website of Kazakhstan Ijara Company. Available at: http://kic.kz/о-компании/шариатское-бюро-srb/ [Accessed on: 5 October 2020]
Maggs Peter B. (2011) Islamic Banking in Kazakhstan Law. – The Netherlands: Martinus Nijhoff Publishers, Review of Central and East European Law, № 36. – 369-396.
National Bank of Kazakhstan (2017) Hronika razvitija islamskogo finansirovanija v Kazahstane [History of Islamic Finance in Kazakhstan]. Available at: https://www.finreg.kz/document/?docid=4680&switch=rus
O vnesenii izmenenij i dopolnenij v nekotorye zakonodatel'nye akty Respublik Kazahstan po voprosam organizacii i dejatel'nosti islamskih bankov i organizacii islamskogo finansirovanija [Amendments to laws of the Republic of Kazakhstan aimed at incorporating Islamic banks and regulating their activities, establishing Islamic financial system] (2009) Available at: https://adilet.zan.kz/rus/docs/Z090000133 (in Russian)
O vnesenii izmenenij i dopolnenij v nekotorye zakonodatel'nye akty Respubliki Kazahstan po voprosam strahovanija i islamskogo finansirovanija [Amendments to some legislative acts of the Republic of Kazakhstan concerning insurance and Islamic financing] (2015) Available at: https://adilet.zan.kz/rus/docs/Z1500000311 (in Russian)
Resolution of Ministers Council of Kazakh SSR (30.11.1990) Available at: https://adilet.zan.kz/rus/docs/P900000472 [Accessed on: November 7, 2020]
Ryskulov A. (2010) Islamskoe Strahovanie (Takaful): 5 kljuchevyh principov [Islamic insurance (Takaful): 5 key principles]. – Almaty: Almaty Regional Financial Center. – 1-7. (in Russian)
Shuptybaeva D. (2014) Qazaqstandagy islamdyq qarjylandyru [Islamic Finance in Kazakhstan]. – Nur-Sultan: Bulletin of the KazUEFIT, No.4. – 106-112. (in Kazakh)
Stambakiyev N., Kahf M. (2020) Shariah Governance in Islamic Financial Institutions in Kazakhstan: Reality and Challenges. Journal of King Abdulaziz University: Islamic Economics, 33 (3). – 121-138.
The law on Banks and Banking Activity in the Republic of Kazakhstan (1995) Available at: https://adilet.zan.kz/eng/docs/Z950002444_
Thomson Reuters, CIBAFI, IRTI (2016) Kazakhstan Islamic Finance 2016, A New Frontier for Islamic Finance. – Nur-Sultan: Prepared for National Bank of Kazakhstan. – 135.
Wolters, A. (2013) Islamic Finance in the States of Central Asia: Strategies, Institutions, First Experiences. – Berlin: PFH Research Papers no. 01, 2013, PFH Private Hochschole Göttingen. – 32.
Zaman Bank (n.d.) About the bank. The website of “Islamic Bank “Zaman Bank” JSC. Available at: http://zamanbank.kz/ [Accessed on: 5 October 2020]
ZICO Shariah (2020) Islamic Finance Master Plan for the Republic of Kazakhstan 2020-2025. – Nur-Sultan: Prepared for AIFC, Supported by IsDB. Available at: https://tinyurl.com/ISMPRK2025 [Accessed on: 15/11/2021].
Алиева Б. (2016) Роль исламского финансирование в Казахстане. – Алматы: Вестник КазНУ. Серия Экономическая. № 2 (114). – 201-204.
Байдаулет Е., Салихова А., Кашимова Л. (2014) Основы этических (исламских) финансов. – Павлодар: PrimaLux. – 325.
Беккин Р. (2010) Исламская экономическая модель и современность. – Москва: Издательский дом Марджани. – 316.
Гриднева Е., Сарыбаева Г. (2019) Возможности развития исламских финансов для экономики Казахстана. – Алматы: Вестник университета Кайнар № 2.1. – 24-28.
Исхаков И. (2010) Опыт Республики Казахстан в привлечении исламского банковского капитала. – Татарстан: Научные труды ЦПЭИ. Экономика. – 74-80.
Национальный Банк Казахстана (2017) Хроника развития исламского финансирования в Казахстане. Электронный ресурс: https://www.finreg.kz/document/?docid=4680&switch=rus
О внесении изменений и дополнений в некоторые законодательные акты Республик Казахстан по вопросам организации и деятельности исламских банков и организации исламского финансирования (2009) – URL https://adilet.zan.kz/rus/docs/Z090000133_О внесении изменений и дополнений в некоторые законодательные акты Республики Казахстан по вопросам страхования и исламского финансирования (2015) – URL https://adilet.zan.kz/rus/docs/Z1500000311
Постановление Совета Министров Казахской ССР (1990) Электронный ресурс: https://adilet.zan.kz/rus/docs/P900000472_
Рыскулов А. (2010) Исламское Страхование (Такафул): 5 ключевых принципов. – Алматы: Региональный Финансовый Центр города Алматы. – 1-7.
Шуптыбаева Д. (2014) Қазақстандағы Исламдық Қаржыландыру. – Нұр Сұлтан: ҚазЭҚХСУ жаршысы, № 4. – 106-112.
References
AFR (n.d.) – The website of The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market. Available at: https://www.gov.kz/memleket/entities/ardfm/press/news/details/254186?lang=en
AIFC (2020) Al Rayan Investment LLC is working on a process to establish a fully-fledged and digital bank in the Astana International Financial Centre. Available at: https://aifc.kz/press-relizy/al-rayan-investment-llc-a-wholly-owned-subsidiary-of-masraf-al-rayan-qpsc-is-working-on-a-process-to-establish-a-fully-fledged-and-digital-bank-in-the-astana-international-financial-centre-aifc/ [Accessed on: 14 December 2021].
Al Saqr Finance. (n.d.) Our team. The website of JSC Al Saqr Finance. Available at: https://alsaqr.kz/ [Accessed on: 5 October 2020]
Alieva B. (2016) Rol' islamskogo finansirovanie v Kazahstane [The role of Islamic Finance in Kazakhstan]. – Almaty: Vestnik KazNU. Serija Jekonomicheskaja. № 2 (114). – 201-204. (in Russian)
An interview conducted by authors (2019) An interview with Janturin Aidar, Business Development Officer at Astana International Financial Center. At: 17th October 2019. – Nur Sultan.
An interview conducted by authors (2019) An interview with Kuralay Yeldesbay, the Chairman of the Board of Association of Islamic Finance Professionals. At: 24th October 2019. – Nur Sultan.
ARDFM (n.d.) The Legislative framework. Available at: https://finreg.kz/?docid=783&switch=english
Baidaulet Y. (2019) Chronology of Islamic Finance in Central Asia: Kazakhstan. – Islamic Finance news, Vol. 16. Issue 19. 15th May 2019. – 21-22.
Baidaulet Y., Salihova A., Kashimova L. et.al. (2014) Osnovy jeticheskih (islamskih) finansov [Basics of ethical Islamic financing]. – Pavlodar: PrimaLux. – 325. (in Russian)
Bekkin R. (2010) Islamskaja jekonomicheskaja model' i sovremennost' [Modern Islamic Economic Model]. – Moskva: Izdatel'skij dom Mardzhani. – 316. (in Russian)
BTA (08.05.2007) Bank Turan Alem JSC USD 250 000 000 Syndicated Wakala restricted with Commodity Murabaha Financing Facility. – The website of BTA bank. Available at: http://bta.kz/en/press/news/2007/07/12/226/ [Accessed on: November 7, 2020]
BTA (12.07.2007) JSC “Bank Turan Alem” and Emirates Bank Group agree on mutual cooperation. – The website of BTA bank. Available at: http://bta.kz/en/press/news/2007/05/08/237/ [Accessed on: November 7, 2020]
Gridneva E., Sarybaeva G. (2019) Vozmozhnosti razvitija islamskih finansov dlja jekonomiki Kazahstana [Opportunities for the development of Islamic Finance for the Economy of Kazakhstan]. – Almaty: Vestnik universiteta Kajnar № 2.1. – 24-28. (in Russian)
ICD-Refinitiv (2021) Islamic Finance Development Report 2020. – Available at: https://icd-ps.org/uploads/files/ICD-Refinitiv%20IFDI%20Report%2020201607502893_2100.pdf
IFDI Refinitiv Thomson Reuters (2020) Islamic Finance Development Indicator 2020. Available at: https://apac1.apps.cp.thomsonreuters.com/web/Apps/IFDI [Accessed on: November 8, 2020]
IsDB. (n.d.) IsDB Group Interactive Map. – The website of IsDB. Available at: https://www.isdb.org/projects/map [Accessed on: November 7, 2020]
Iskhakov I. (2010) Opyt Respubliki Kazahstan v privlechenii islamskogo bankovskogo kapitala [Experience of Republic of Kazakhstan in attraction an Islamic Banking Capital]. – Tatarstan: Centr perspektivnyh jekonomicheskih issledovanij. Jekonomika. – 74-80. (in Russian)
Khaki, G., Malik B. (2013) Islamic Banking and Finance in Post-Soviet Central Asia with Special Reference to Kazakhstan. – Journal of Islamic Banking and Finance. Vol. 1. No. 1. December 2013. – 11-22.
KIC (n.d.). About us. The website of Kazakhstan Ijara Company. Available at: http://kic.kz/о-компании/шариатское-бюро-srb/ [Accessed on: 5 October 2020]
Maggs Peter B. (2011) Islamic Banking in Kazakhstan Law. – The Netherlands: Martinus Nijhoff Publishers, Review of Central and East European Law, № 36. – 369-396.
National Bank of Kazakhstan (2017) Hronika razvitija islamskogo finansirovanija v Kazahstane [History of Islamic Finance in Kazakhstan]. Available at: https://www.finreg.kz/document/?docid=4680&switch=rus
O vnesenii izmenenij i dopolnenij v nekotorye zakonodatel'nye akty Respublik Kazahstan po voprosam organizacii i dejatel'nosti islamskih bankov i organizacii islamskogo finansirovanija [Amendments to laws of the Republic of Kazakhstan aimed at incorporating Islamic banks and regulating their activities, establishing Islamic financial system] (2009) Available at: https://adilet.zan.kz/rus/docs/Z090000133 (in Russian)
O vnesenii izmenenij i dopolnenij v nekotorye zakonodatel'nye akty Respubliki Kazahstan po voprosam strahovanija i islamskogo finansirovanija [Amendments to some legislative acts of the Republic of Kazakhstan concerning insurance and Islamic financing] (2015) Available at: https://adilet.zan.kz/rus/docs/Z1500000311 (in Russian)
Resolution of Ministers Council of Kazakh SSR (30.11.1990) Available at: https://adilet.zan.kz/rus/docs/P900000472 [Accessed on: November 7, 2020]
Ryskulov A. (2010) Islamskoe Strahovanie (Takaful): 5 kljuchevyh principov [Islamic insurance (Takaful): 5 key principles]. – Almaty: Almaty Regional Financial Center. – 1-7. (in Russian)
Shuptybaeva D. (2014) Qazaqstandagy islamdyq qarjylandyru [Islamic Finance in Kazakhstan]. – Nur-Sultan: Bulletin of the KazUEFIT, No.4. – 106-112. (in Kazakh)
Stambakiyev N., Kahf M. (2020) Shariah Governance in Islamic Financial Institutions in Kazakhstan: Reality and Challenges. Journal of King Abdulaziz University: Islamic Economics, 33 (3). – 121-138.
The law on Banks and Banking Activity in the Republic of Kazakhstan (1995) Available at: https://adilet.zan.kz/eng/docs/Z950002444_
Thomson Reuters, CIBAFI, IRTI (2016) Kazakhstan Islamic Finance 2016, A New Frontier for Islamic Finance. – Nur-Sultan: Prepared for National Bank of Kazakhstan. – 135.
Wolters, A. (2013) Islamic Finance in the States of Central Asia: Strategies, Institutions, First Experiences. – Berlin: PFH Research Papers no. 01, 2013, PFH Private Hochschole Göttingen. – 32.
Zaman Bank (n.d.) About the bank. The website of “Islamic Bank “Zaman Bank” JSC. Available at: http://zamanbank.kz/ [Accessed on: 5 October 2020]
ZICO Shariah (2020) Islamic Finance Master Plan for the Republic of Kazakhstan 2020-2025. – Nur-Sultan: Prepared for AIFC, Supported by IsDB. Available at: https://tinyurl.com/ISMPRK2025 [Accessed on: 15/11/2021].
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How to Cite
Nagayev, R., & Stambakiyev, N. (2022). Islamic Finance Industry in Kazakhstan: Then and Now. Eurasian Journal of Religious Studies, 29(1), 61–71. https://doi.org/10.26577//EJRS.2022.v29.i1.r8
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Religious Studies
