Islamic Finance set to surge in Central Asia, poised to hit $6.3bn by 2033

By Gloria Methri

Islamic finance in Central Asia is on the cusp of a transformative decade, with the market projected to more than double from $2.5 billion in 2028 to $6.3 billion by 2033, according to a new joint report by the Eurasian Development Bank (EDB), the Islamic Development Bank Institute (IsDBI), and the London Stock Exchange Group (LSEG).

The landmark study, The Future of Islamic Finance in Central Asia, positions the region as an emerging hub for Shariah-compliant financial solutions. It is driven by strong demand for ethical finance, expanding regulatory support, and the growing role of FinTech in fostering inclusion.

Nikolai Podguzov, Chairman of the Management Board of the Eurasian Development Bank (EDB), emphasised the bank’s commitment to expanding Islamic finance in Central Asia, including the establishment of its Islamic Window to support relevant projects and facilitate investments.

“One of the EDB’s strategic priorities is to become a platform for Islamic finance in Central Asia. The further development of Islamic finance in Central Asia will expand financial inclusion and connect local businesses to the global Islamic market, contributing to regional economic growth. With the Islamic Development Bank Group’s support, EDB has started to develop an “Islamic Window” for financing projects in accordance with Sharia principles. The priority areas of investments will be energy, transport, social infrastructure, food security and industry”, Podguzov said.

The study highlights Kazakhstan, Uzbekistan, and Kyrgyzstan as high-potential markets, thanks to their youthful demographics, evolving legal frameworks, and the increasing openness of their financial institutions to Islamic finance. The report also underscores the importance of FinTech in enabling last-mile delivery of Shariah-compliant financial products, especially in rural and underserved communities.

A New Growth Frontier for Islamic FinTech

As financial inclusion becomes a regional policy priority, the synergy between Islamic finance and FinTech innovation is gaining momentum. From digital microfinance to blockchain-enabled sukuk issuance, new-age technologies are being harnessed to modernise how Islamic finance is accessed and scaled.

Key opportunities highlighted in the report include:

• Development of Islamic FinTech ecosystems across AIFC in Kazakhstan and Tashkent’s International Financial Centre.

• Sukuk market expansion is being used to fund sustainable infrastructure, with EDB’s plans for a $500 million sukuk issuance seen as a milestone.

• Digital inclusion strategies through postal networks and mobile-first platforms to reach unbanked populations.

The projected CAGR reflects a compound shift in how finance is understood and delivered in the region—it is now ethical, tech-enabled, and future-focused.

Global Investors Eye a Rising Market

This forecasted boom also places Central Asia on the radar of global investors seeking exposure to emerging Islamic finance markets. With increasing collaboration between regional regulators, development banks, and global exchanges, the infrastructure for cross-border Shariah-compliant investment is rapidly taking shape.

The study calls for capacity building, legal harmonisation, and public-private partnerships to unlock the sector’s potential fully. As digital-first models of financial services gain traction, Islamic finance is uniquely positioned to offer products that are not only inclusive but also values-driven.