The EDB and Dar Al Sharia sign an agreement to develop Islamic finance
Astana, 14 March 2024. The Eurasian Development Bank (EDB) and Dar Al Sharia entered into an agreement to implement Islamic finance principles and standards at the EDB.
Dar Al Sharia is a prominent consulting firm established in 2007 by Dubai Islamic Bank, the world’s first bank to operate under the principles of Islamic finance. As Sharia advisor, the company will assist in developing strategic approaches and customising the EDB’s policies and procedures. Pilot projects will also be designed to be funded under Sharia standards.
Conventional lending instruments (primarily investment and project finance) currently comprise over 80% of the EDB’s portfolio in its member economies. By 2026, the Bank expects to achieve greater diversification in its portfolio in terms of financial instruments employed.
All Central Asian governments pay special attention to the development of Islamic finance. Some countries have enacted legislation to establish the relevant finance segments such as banking and leasing. The Kyrgyz Republic has a rapidly growing microfinance sector. Overall, at the end of 2021, Islamic assets represented 0.2% of total banking assets in Kazakhstan, 1.5% in the Kyrgyz Republic and 1.1% in Tajikistan.
Additional Information:
The Eurasian Development Bank is an international financial institution promoting integration and development in its member countries. For more than 18 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals US $7 billion. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles in its operations.
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