Prospects and opportunities for the development of Islamic finance in Kazakhstan: opening Islamic windows

Abstract

The article considers the prospects for the development of Islamic finance in Kazakhstan by opening «Islamic windows». The world practice of introducing Islamic windows in traditional institutions (banks) in such countries as Indonesia, Malaysia, Qatar, Germany, the United Kingdom, Algeria was also considered. This study aims to compare Islamic institutions and Islamic windows of traditional institutions(banks) in terms of their advantages and disadvantages. The purpose of this article is to investigate the prospects of the implementation of Islamic windows in the Republic of Kazakhstan. The article used empirical research methods (comparison). And strengths, weaknesses, opportunities, and threats (SWOT-analysis) of the application of Islamic windows in traditional institutions (banks) in the Republic of Kazakhstan were analyzed. The analysis carried out in this study shows that in the world practice the opening of Islamic banking departments in traditional banks, which is called «Islamic windows» was the beginning of the development of Islamic finance in the same countries. It was also found that the effectiveness of Islamic windows of conventional banks was much higher compared with the Islamic bank. Thus, opening Islamic windows in the second-tier banks and traditional financial institutions of the Republic of Kazakhstan can be an effective mechanism for the development of the Islamic finance market and accelerate the process of implementation of Islamic financial instruments.