1. How do you see the introduction of Islamic finance in Uzbekistan at this stage?
Islamic finance is still at an early stage of development in Uzbekistan. Some segments of the industry, such as Islamic microfinance and banking, now have supporting legal foundations and are starting to grow on that basis. Others, such as Islamic insurance (takaful) and leasing (ijarah), were introduced without much legal grounding and operate by working around legal gaps. For a few more, such as Islamic capital markets (including the issuance of sukuk), the legal foundations are still being developed and there is some distance to cover. Overall, the Islamic finance industry is making significant inroads into the country, with notable progress achieved in 2026, but it is too early to say that a complete ecosystem is in place.
2. What kind of coordination is taking place between regulators and banks?
Islamic banking is probably the segment of the industry that has attracted the most attention from regulators in Uzbekistan. The March 2026 Law No. ZRU-1126, “On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan Aimed at the Introduction of Islamic Banking Activity,” which opened the door to Islamic banking, is by far the strongest legislation passed in the country in support of Islamic finance so far. It entered into force on 29 June 2026. Close to a dozen conventional banks are trying to enter the industry by establishing Islamic windows, and one or two local and international Islamic financial institutions are seeking to establish full-fledged Islamic banks. Following the passage of the law, the Central Bank of Uzbekistan adopted a resolution in July 2026 amending its Regulation on the Procedure and Conditions for Issuing Permits for Banking Activities (registered by the Ministry of Justice on 17 July 2026), which clarifies the requirements for Islamic banking licenses. The resolution specifies the requirements for establishing a Shariah board (Islamic finance council) within the bank, including Central Bank
3. Do you see growing demand for Islamic banking products in Uzbekistan?
Yes. Since both the government and the people of Uzbekistan started to warm up to Islamic finance from 2017 onwards, various surveys indicate that more and more people are attracted to Islamic banking products. Surveys conducted since then show high demand for these products. For example, the 2020 UNDP-supported study by Imammazarov, “Landscaping Analysis of Islamic Finance Instruments in Uzbekistan,” found that about 30 percent of the population do not use conventional bank services for religious reasons, and that 75 percent of individuals and 61 percent of businesses would be willing to use Islamic financial services if they were offered in the country. The population of Uzbekistan is also becoming more knowledgeable about Islamic banking products, partly because some of them are already offered by Islamic microfinance institutions and partly because more news and articles are being published in the Uzbek media. There is also a noticeable increase in research and studies related to Islamic banking products, which reflects heightened interest in these products among researchers, consumers and financial institutions.
4. Which sectors (SMEs, retail, infrastructure, etc.) do you think will benefit the most from Islamic finance?
Speaking generally, almost all sectors of the economy stand to benefit from the introduction of Islamic finance in Uzbekistan. Currently, the retail segment is reaping the fruits of Islamic finance through microfinance institutions and buy-now-pay-later (BNPL) product offerings. SMEs are also benefiting from ijarah and murabaha financing offered by Islamic microfinance institutions. As of now, no Islamic window or full-fledged Islamic bank has started operating in Uzbekistan, but it should not be long before they appear in the country’s financial landscape. Once Islamic banking is fully introduced, larger players in manufacturing, construction, and infrastructure will also stand to benefit from this new, more inclusive source of financing. Last but not least, the government agencies and large corporations may start using Islamic instruments by issuing sovereign and corporate sukuk. The main losers could be conventional financial institutions that fail to adapt to the changing demand, that do not introduce Islamic windows, or do not convert to Shariah-compliant operations.
5. How can Islamic finance help attract foreign investment into Uzbekistan?
As the question correctly hints, the introduction of Islamic finance in Uzbekistan not only helps mobilize domestic financial resources by encouraging devout Muslims to invest and finance using Shariah-compliant products, but may also significantly assist in attracting foreign investment. It is well known that in recent years the government of Uzbekistan has positioned the country among the top investment destinations in Asia, with tremendous growth potential. However, since the capital markets are still underdeveloped and the financial industry has relied mostly on the conventional system, these attractive opportunities were difficult for Muslim investors abroad to access. Once the Islamic finance industry makes significant inroads into the country and Islamic banking and capital markets start functioning fully, Muslim foreign investors will be able to enter freely and enjoy the investment opportunities available in the country, like any other foreign investors. They could do so directly, by starting new businesses or investing in shares or sukuk of Uzbek corporations, or indirectly, by purchasing sovereign sukuk issued by the government of Uzbekistan or by putting money into Islamic funds that invest in Uzbekistan.
6. What types of Islamic products do you think will be introduced first? (e.g., financing, leasing, etc.)
We already see some Islamic finance products being introduced in the country, such as murabaha, BNPL, and ijarah as financing tools, mudarabah and musharakah as investment products, and takaful as a protection instrument. However, most of them are currently implemented at the retail and SME levels, since the sources of funds available to the currently operating Islamic financial institutions are limited. Nonetheless, once Islamic banks start operating, we can expect a more diverse range of products, including salam, istisna, Islamic syndicated project finance, sukuk, wakalah- or mudarabah-based deposits,
7. What are the key challenges Uzbekistan may face in implementing Islamic finance?
So far, the momentum of Islamic finance development in Uzbekistan over the last three to four years has been impressive. As I mentioned earlier, 2026 was the most important year for the country’s Islamic finance industry, with many new laws and regulations related to Islamic finance adopted during this year. If this trend continues and Uzbekistan’s legal reforms cover the remaining segments of the industry, the country may have a complete Islamic finance ecosystem within the next five years. However, if the current reforms stall and no new legislation is introduced for the remaining sectors, it may prevent the full potential of Islamic finance from being realized. Since the Islamic finance industry usually flourishes in an environment where all pieces of the ecosystem, such as Islamic banking, takaful, capital markets, leasing, and social finance, function together, missing one or two elements may disrupt its smooth operation. Additionally, educated human capital and a customer base with adequate knowledge of Islamic finance are essential. Hence, both government and private actors should actively engage in educating the public and offering educational degrees and certificates to build the workforce and customer base needed to support a growing Islamic finance industry.
8. What message would you like to give to banks and investors regarding Islamic finance in Uzbekistan?
Islamic finance has entered the financial system of Uzbekistan, and it is already becoming the new rule of the game in the industry. Even though many banks are interested in introducing Islamic windows, I see some others that are not showing similar interest. To stay competitive and not lose their customer base, I believe all banks in Uzbekistan should adapt to this new reality and start developing their own Islamic windows. Businesses and investors that have not yet used Islamic finance products should start training their finance departments about these products and learn about their benefits for their companies and the industry at large. Even if you are not interested in Islamic financing, your customers and suppliers may start choosing their partners based on the financial products they use. Even regular citizens should start learning more about Islamic finance products, since it is always better to be educated and financially literate when making even basic financial decisions in your personal life.