Exploring the Potential of Islamic Finance in Uzbekistan

Abstract

This research explores the potential for Islamic finance to grow in Uzbekistan and its alignment with the principles
of the green economy. It assesses the performance of Islamic financial institutions in the country and identifies obstacles
to its development. Islamic finance has emerged as an alternative to conventional banking, attracting entrepreneurs
with its fair profit distribution. Uzbekistan›s President Sh. Mirziyoyev recognizes the need for a legal framework to support
Islamic financial services. Globally, Islamic finance is a rapidly expanding sector, with annual profit growth of 15–20%
and asset expansion exceeding 20%. By adopting Islamic finance principles, Uzbekistan can promote sustainable development
in line with the green economy. Its focus on ethical investments and risk-sharing arrangements supports
environmentally friendly initiatives. To seize the opportunities presented, a comprehensive study and implementation of
Islamic finance in Uzbekistan are crucial, along with the examination of regulatory frameworks. The research methodology
involves a literature review, expert interviews, data collection, comparative analysis, and examination of regulatory
frameworks. Collaboration with institutions such as the Islamic Research and Training Institute (ITB) and the Islamic
Investment Insurance and Export Credit Corporation (IIIEC) supports the development of Islamic finance in Uzbekistan.
Existing financial institutions like the IMAN Investment Fund and Taiba Leasing demonstrate the presence of Islamic finance
in the country. Addressing challenges, fostering collaboration, and embracing the principles of the green economy
will enable Uzbekistan to utilize Islamic finance for sustainable development and attract foreign investments.