Foydalanilgan adabiyotlar ro`yxati:
N. Sirajiddinov. Globalization: global opportunities and
challenges//Book Capacity building in the countries – ESCATO
members for regulating the process of globalization: case study in
Nazarova G.G., Xaydarov N.X., Akbarov M.T. Xalqaro iqtisodiy
munosabatlar. T.: MChJ “RAM-S”, 2007 y.
Z.Xurramova, S.Toshaliyeva, J.Turopov «Jahon iqtisodiyoti va
xalqaro iqtisodiy munosabatlar». Qarshi.: «Nasaf» nashriyoti - T.:,
Internet manbalari .
EXPANDING THE USE OF ISLAMIC BANKING SERVICES
IN FINANCING INVESTMENT PROJECTS IN UZBEKISTAN
Zayniddinov Ruhiddin Khusniddin ogli
Senior Teacher, Department of World Economy
Tashkent State University of Economics
Using effective methods in financing investment projects are vital
for minimization of project risks of investment activities in Uzbekistan.
In this case, improving the use of the financial services of rapidly
growing Islamic financial institution in the terms of improving the
quality of financial services, increasing the capacity of the private
sector, improving the living standards of the population, and
contributing to the development of the country's economy has been
gaining importance in recent years.
At the opening ceremony of the
Annual Meeting of the Board
of Governors of the Islamic Development Bank (IsDB)
September 3-4, 2021, in Tashkent
Sh.M.Mirziyoyev who is the
President of the Republic of Uzbekistan said that “The Islamic world
has huge investment potential and energy resources. Moreover, he
emphasized that proper use of Islamic financial services will promote
expansion of international trade, economic, financial, and investment
cooperation with the Member States of Organization of Islamic
Cooperation (OIC) member states, and establishing new transport
corridors which are connected to our countries will allow achieving
high rates of economic development in Uzbekistan.
"We are grateful to the Islamic Development Bank for
its timely support of our anti-crisis measures. To this day, the Bank has
approved 30 major investment projects in Uzbekistan in health,
education, agriculture, water supply, drinking water supply, road
infrastructure and construction of affordable housing in rural areas
worth over US$ 2.5 billion” he said.
Furthemore, the address of the President of the Republic of
Uzbekistan on December 28, 2020, "It is time to create a legal
framework for Islamic finance," which shows once more the
importance of this sector and its role in economic development in our
Therefore, it is necessary to attract funds from investment funds,
organisations and existing banks were based on Islamic finance in
Muslim countries in order to support the socio-economic development
of Uzbekistan and expanding opportunities for financing investment
Nowadays, Islamic financial institution is one of the fastest-
growing and most reliable sectors in the world, with a total of $ 2.88
trillion in assets, which is growing by 15-20% annually.
In 2004, Uzbekistan became a member of the Islamic Corporation
for the Development of the Private Sector. The IDB Representative in
Uzbekistan began its work in October 2006 in Tashkent.
Since that time there have been offered some Islamic financial
services in financing a number of investment projects which have been
Currently, Uzbekistan has been considering the issue of joining
two other organizations of ITB which are the Islamic Corporation for
Investment and Export Credit Insurance (ICIEC) and the International
Islamic Trade and Finance Corporation (ITFC).
Figure 1. Funds provided by ITBG for Uzbekistan (USD in
From the given figure 1, it can be seen that the amount of projects
have been approved by the Islamic Development Bank for Uzbekistan
which is 2.1 billion USD, of which 304 mln. USD belongs to ICD and
1.82 bln. USD the share of the ITB in the given period.
In 2010, an initial leasing company named “Toiba Leasing” was
founded by ICD with a charter capital of $ 5 million, also provided its
Sharia-compliant leasing services to the private sector. In the shown
period (2010-2017), the company financed more than 200 worth of
projects included USD 26.3 mln.
Tables 1 and 2 summarize the IDB's financing methods for
Uzbekistan and its sectoral financing portfolio.
In terms of financing methods, the first place was occupied by
istisna (model for construction works), the second and third places were
taken by murabaha (sale in installments) and ijara (leasing).
Table 1. IDBG portfolio for Uzbekistan in terms of financing
Methods of financing
Special assistance operations
Sell to pay in installments
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
IDB Ordinary Capital Resources
The results, as shown in Table 1, indicate that the main share of
projects (45.4%) were the construction and building materials industry
while, the second, third, and fourth places were gained by light industry
(14.87%), transport services (4.96%) and food production (4.95%)
respectively. The share of other sectors was 29.8 % in total and less than
4 % on an individual basis.
It can be seen that construction-oriented projects were the main
part of the financing, which included the reconstruction of irrigation
systems, road construction, construction of schools, colleges, and other
Funding by ICD was mainly used as Murabaha contracts, and
more than 70% of it directs on lines of financing through banks, and the
remaining 30% was direct financing. These projects of the ICD
contribute to the development of various sectors of the economy, in
particularly, including pharmaceuticals, healthcare, construction
materials, textiles, food industry, agriculture, and others.
Table 2. Financing portfolio of IDB and ICD for Uzbekistan
shown in the part of the sectors
As follows from the table shown above, the projects have been
approved for financing by the Islamic Development Bank Group by
sector, the largest investment was directed to the agricultural and rural
development sector, which accounted for almost 30% of the ITBG
portfolio. After the figure, it was followed by energy with a share of
25%, transport (16%) and finance (13%) respectively.
Despite being the last of the CIS countries to join the IDB and
ICD, Uzbekistan ranks first in the portfolio of both organizations in the
In March 2018, it was signed between the Government of
Uzbekistan and the ITFC about 100 million USD allocated to finance
trade operations. According to this contract, the corporation has got a
chance to finance trade projects before being a member of Uzbekistan
in the organization, and to date, the ITFC has provided a line of
financing based on Murabaha to the Asian Alliance Bank, Trustbank,
and Kapital Bank.
In addition, by 2021, the Islamic Corporation for the Development
of the Private Sector (ICD) has signed agreements to open windows
providing Islamic financial products and services ("Islamic windows")
in several commercial banks in Uzbekistan. The launch of these
windows is scheduled for the second half of 2021 .
The Islamic window is in most cases set up in countries where
there is no Islamic financial system or legislation on Islamic finance.
Because, the Islamic window offers a limited number of services and
products as a product of a traditional bank, based on the existing laws
and legal framework of a particular country.
Islamic banking services and products are usually completely
provided after the relevant laws have been enacted in that country.
Therefore, the most common purpose of establishing Islamic windows
1) To study the demand for Islamic financial services in the
2) Offering Islamic financial services on the basis of the existing
infrastructure (buildings, staff, etc.) in conventional banks without
3) To make practical proposals for the development of a law on
Islamic finance and banking in the country through the study and in-
depth analysis of the activities of established Islamic windows;
4) Increasing their participation in the country's economy by
increasing the financial literacy of the population and the private sector;
5) Development of future development strategies of banks based
on the analysis of the results of the Islamic window.
In conclusion, from the outcome of our investigation, it is possible
to conclude that Islamic finance is a new field for the Uzbek economy
but it is necessary for both entrepreneurs and individuals. Moreover, the
emergence of alternative financing products will promote to expand of
financial assets in order to finance investment projects in the country
However, existing expectations can be seriously distorted due to the
lack of experience and knowledge of potential customers in the field of
Islamic finance, as well as insufficient improvement of banking and
financial legislation in Uzbekistan.
Furthemore, our research demonstrated that current legislation
prohibits commercial banks to offer Islamic finance services. In
particular, current tax and banking legislation does not allow
conventional banks to buy and sell Islamic products.
As it is not generally agreed that tax law in Uzbekistan, if banks
finance equipment or technology under Islamic finance, they have to
pay value-added tax (VAT) or cannot be allowed to charge a payment
for late in Islamic finance, and even if they are taken for disciplinary
purposes, the money is credited to a separate account and used for
charity. However, this fine is considered as a profit by the tax
authorities and charged as a tax.
Therefore, the Islamic window is in this case can be solution for
the issue before offering whole Islamic financial services in order to
study the demand for Islamic financial services in the country.
On the basis of the promising findings presented in this paper,
work on the remaining issues is continuing and will be presented in
3. Baydaulet, E.A. Islomiy moliya asoslari [Matn] –Toshkent:
“O’zbekistan” NMIU, 2019. -432 b.
ХИТОЙНИНГ МАРКАЗИЙ ОСИЁГА ТАЪСИРИ
Ижтимоий гуманитар фанлар
кафедраси профессри Б.Алиев
Тахминан ўттиз йил мобайнида Хитой ва Марказий Осиё
ўртасидаги муносабатлар жуда динамик эди. 90 йилларнинг
бошидан Хитой дунёнинг етакчи давлатларидан бирига айлана
Хитойнинг Марказий Осиёдаги сиёсати Пекин учун жуда
муҳим. Аммо у олий раҳбарият учун катта аҳамиятли эмас. 90-
мустақилликни қўлга киритганда, бу ташқи сиёсатнинг муҳим
йўналишларидан бири саналган. Айниқса, Пекин учун чегарадош
давлатларда тинчлик бўлиши муҳим эди. Айни пайтда Марказий
Осиё давлатлари барқарор ривожланяпти, хавфсизлик етарлича