The Expansion of Islamic Finance in Uzbekistan and Its Implications for Sustainable

Economic Development

Abdurrahman Yazıcı

 

Abstract: Uzbekistan, a country with a predominantly Muslim population, has recently demonstrated a strong commitment to developing an Islamic finance ecosystem as part of its broader economic reform agenda. Despite the potential of Islamic finance in the country, there is still limited research on its regulatory and institutional development, and there is a lack of studies that examine the issue as a whole. This article addresses this gap by analysing the evolution of Islamic finance in Uzbekistan, the regulatory reforms that commenced in 2017, and the role of government policies in shaping the sector. The article examines the establishment of domestic Islamic financial institutions and Uzbekistan’s engagements with global Islamic finance bodies. Through an analysis of legislative developments and institutional frameworks, this article highlights key opportunities and challenges, including regulatory gaps and operational barriers. The findings suggest that while Islamic finance presents significant prospects for Uzbekistan’s economic development, successfully establishing a robust sector requires comprehensive regulatory alignment, institutional capacity-building, and strategic collaboration with international financial institutions. This article contributes to the existing literature by offering policy recommendations aligned with Uzbekistan’s ‘2030 Strategy’ for economic growth, focusing on enhancing financial inclusion and fostering a sustainable Islamic finance ecosystem.