A new report by the Eurasian Development Bank (EDB), Islamic Development Bank (IsDB), and London Stock Exchange Group assesses the current state and future of Islamic finance in Central Asia, identifying significant potential despite the industry’s small size. While Kazakhstan and Uzbekistan lead regional development, Turkmenistan remains at a nascent stage with no Islamic finance institutions or regulatory framework in place.
Islamic finance in Central Asia accounts for just $699 million in assets (2024), or 0.01% of the global $4.9 trillion Islamic finance market. The region has strong potential due to a high Muslim population (85%) and growing economies. By 2033, Islamic finance assets in Central Asia are expected to reach $6.3 billion, with Kazakhstan and Uzbekistan driving growth. Priority sectors include energy, transport, food security, and social infrastructure.
Turkmenistan is ranked 111th globally in Islamic finance development (2023). Despite having a large Muslim population (93%), which might be interested in Islamic finance, Turkmenistan does not have active Islamic finance institutions, enabling laws and qualified professionals.
Figure 1. Comparison Ranking and Data for Central Asia
Source: Eurasian Development Bank and Islamic Development Bank Institute, 2025
As illustrated in Figure 1, financial inclusion remains low in Turkmenistan. For instance, 41% of adults do not have financial accounts in Turkmenistan. While 51% of adults have savings only 5% keep them in financial institutions.
Turkmenistan already engages with IsDB on development projects ($1.387 billion in financing), indicating an entry point for Islamic finance integration. High savings held outside formal banks signal a demand for alternative banking options, such as Islamic windows. If appropriate legal reforms and institutional capacity are developed, Turkmenistan could tap into the broader regional growth in Islamic finance.
While direct forecasts for Turkmenistan’s Islamic financial assets are unavailable due to data limitations, the region as a whole is projected for significant growth in Islamic banking and sukuk assets (Islamic bonds), assuming governments actively create a favorable environment. Turkmenistan’s large Muslim population and existing engagement with IsDB suggest a significant untapped potential that could contribute to this regional growth if appropriate frameworks are put in place.
Quotes from the report:
- With the exception of Turkmenistan, which does not yet have any Islamic financial institutions, the Central Asian countries have made significant progress, with each country having various sectors that contribute to the development of the Islamic finance market.
- In Turkmenistan, the Islamic finance industry is in its infancy and there are currently no Islamic financial institutions operating in the country. However, the high Muslim population means there is significant demand for Islamic financial services.
