The results of the last Thursday of the Baku conference "Islamic Finance: Current status and next wait" indicate that Azerbaijan should expect growth of Islamic banking segment in the whole banking sector.
At present, loans granted by the rules of Sharia account for only 1.6% of total loans. Islamic lending volumes grew significantly over the last year and increased by 220 million to 300 million AZN. The total amount of all types of loans in the country in 2014 amounted to 18.5 billion manat.
Islamic banking is most actively used by the International Bank of Azerbaijan (IBA) and Nikoil Bank. In general, it is used by seven banks and credit institutions.
According to the Chairman of the Center for Economic Resources, Ruslan Atakishiyev, by the end of the year it is projected to increase this figure to 500 million manat.
According to him, Islamic banking can be a catalyst for accelerated development of small and medium-sized businesses, and non-oil sector as a whole in terms of attracting cheap and effective resources. Atakishiyev presented data on global turnover of Islamic finance, which, as statistics show, has reached $ 1.3 trillion.
A member of the Committee on Economic Policy of the Milli Majlis Ali Masimli noticed that the application of Islamic banking is especially relevant in the field of small businesses, particularly in rural areas, as Islamic commercial loans are interest-free (according to the canons of Islamic banking, in the issuance of non-interest loans a bank becomes only an equity partner in the project until the complete return of the credit - Turan).
In principle, it is understood in the IBA, and therefore, the bank is developing its branch network of Islamic banking in the regions. IBA's most consistently lobbying the idea of Islamic banking and sets the ambitious goal of guiding the banking system in the former Soviet space.
The advantages of Islamic banking were praised by the former Soviet apparatchik, the head of the Economic Policy Committee of the Milli Mejlis Ziya Samedzade, who noted the need for a comparative form of using the basic principles of Islamic economics. He also expressed confidence that the conference will give impetus to the development of Islamic banking in Azerbaijan.
Earlier, Turan reported that the one-day international conference Islamic Finance: Current Status and New Expectations was organized by the Institute of Economics of the National Academy of Sciences of Azerbaijan with the assistance of Turkish Cooperation and Coordination Agency (TIKA). It was also attended by experts from a number of Islamic countries. -0-
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