Acknowledgements. This study is funded by RFBR, project number 19-310-60002 “Islamic Finance in the Post-Soviet States: challenges and opportunities for investment growth in the CIS countries”.
Abstract. Over the last decades Islamic Finance has been expanding its role in the global economy, including in the Post- Soviet Area. Who are the key players of Islamic Finance market? What are their investment strategies here? This paper considers above questions by investigating more than 250 deals involving Islamic investors over the period 1991–2020 in Kazakhstan Republic. The data on deals gathered from two main sources: i) M&A database Zephyr (Bureau van Dijk), and ii) open sources (information agencies, company annual reports, press-releases, presentations, interviews). We are analyzing the growth of the Islamic Finance industry in Kazakhstan, and dependency on two key investors – Islamic Development Bank and Abu Dhabi Government. Then we study the structure of Islamic Finance investments by the type of investors. We found that despite the small share of Islamic banks and Islamic leasing (ijara) companies they have become an important factor of the financial sector in Kazakhstan. We saw that the potential for issuing sukuk and developing Islamic insurance (takaful) have not yet been realized but Islamic Finance became one of the six pillars of the Astana International Financial Centre (AIFC). In addition, we have identified several factors critical to further Islamic Finance market development in the Central Asia. In conclusion there is a question whether Kazakhstan financiers and policymakers will be able to apply creative approach to Islamic Finance that not only allow to adopt the experience of other countries, but also bring something new.
Keywords: Islamic finance, Islamic bank, sukuk, murabaha, ijara, takaful, Astana International Financial Centre, Kazakhstan, CIS, Central Asia
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