The Role of Islamic Finance in the Development of Post-Soviet Central Asian States

Muhammet Yurtseven

 

Abstract: This article aims to evaluate the impact of Islamic financial institutions on the economic development of post-Soviet Central Asian states. Islamic financial institutions have significant potential to support the growth of micro, small and medium-sized enterprises in Central Asia by offering financing solutions that comply with Islamic principles. Using a qualitative approach; this article examines how financing methods provided by Islamic financial institutions can enhance productivity, innovation and competitiveness in the region. The findings demonstrate that access to Islamic finance contributes to the financial performance of institutions and businesses and strengthens social solidarity and economic sustainability in the region. Furthermore, this article identifies various challenges faced by Central Asian states in accessing Islamic finance and provides policy recommendations to overcome these obstacles. The role of Islamic financial institutions as a catalyst for economic development in the region can contribute to improving societal welfare, the growth of individual enterprises and the reduction of economic external dependence. Hopefully, this article will guide the development of policies and strategies to enhance the effectiveness of Islamic financial institutions in post-Soviet Central Asian states while contributing to these countries' national economic development goals.