THE RISE OF ISLAMIC FINANCE IN KYRGYZSTAN: CHALLENGES, OPPORTUNITIES, AND STRATEGIC DIRECTIONS

Abstract

This study examines the burgeoning field of Islamic banking within the Kyrgyz Republic, where Islamic financial institutions have globally amassed assets exceeding $300 billion across 75 countries. Focusing on the theoretical and practical aspects of introducing and expanding Islamic banking in Kyrgyzstan, particularly through the case of Eco Islamic Bank OJSC, the research aims to provide a comprehensive analysis of the sector's current state, challenges, and future potential. Employing a variety of methodologies including system analysis and comparative methods, and drawing on the works of both international and local scholars in Islamic finance, the study outlines practical recommendations for the sector's development. The analysis reveals Eco Islamic Bank's relative stability as a positive indicator of the sector's viability. It underscores the National Bank of the Kyrgyz Republic's commitment to fostering Islamic banking as a means to diversify financial services and enhance sector competition. The research highlights the strategic importance of Islamic banking for the Kyrgyz Republic, suggesting its capacity to attract Islamic investments and recommending the expansion of international relations and partnerships with global Islamic financial entities. This contributes to the international scholarship on Islamic banking, illustrating its significance and potential impact on the Kyrgyz economy and beyond.