The Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD) has signed sharia-compliant financing agreements with six banks in Uzbekistan, boosting the former Soviet state’s efforts to develop Islamic finance.
Uzbekistan, the most populous country in Central Asia where a majority of its 32 million people are Muslim, is introducing Islamic finance rules to expand its banking sector and tap foreign markets.
The financing lines from the ICD, the private-sector arm of the Islamic Development Bank Group, are modest in size but would help local banks offer Islamic financial products of their own. The lines include a $7.5 million financing agreement with state-controlled Asaka Bank, which would be used to support private companies.
Other lenders receiving financing lines are Uzbek Industrial and Construction Bank, Turonbank, Hamkorbank, Kapitalbank and Asia Alliance Bank.
In July, the ICD extended similar financing lines to Trustbank and InFinBank.
Facilitating Islamic finance, which follows religious principles such as bans on interest and monetary speculation, is seen as a way to help attract investment from the Middle East and Southeast Asia.