Otbasy Bank, together with its partners, plans to launch an Islamic mortgage in Kazakhstan in 2025
In Astana, Otbasy Bank (a subsidiary of Baiterek Holding), the Union of Builders of Kazakhstan, and the Association of Islamic Finance and Business (AIFB) signed a memorandum on the development of the Islamic financial industry in Kazakhstan.
Their partnership and joint efforts will foster the growth and promotion of Islamic financing tools and Islamic mortgage products in the country.
In the initial stage, the parties will work together to study and potentially amend Kazakh legislation, conduct joint training seminars and webinars in the field of Islamic financing, and carry out expert, information-analytical, and research activities.
“We have met more than once with a group of experts and the Association of Developers and have come to understand that there is significant demand for Islamic mortgages in Kazakhstan. Our citizens who adhere to religious principles cannot take money at interest. Yet, they need their own housing. We are one society and one state; we enjoy freedom of religion and must support those whose faith does not allow them to solve their housing needs. Our goal is to start working on launching an Islamic mortgage in 2025.
We have a law on housing construction savings, which currently does not include Islamic mortgages. Legislative initiatives will help create a separate section, a so-called ‘Islamic window’ in the law, describing how to obtain an Islamic mortgage,” explained Chairperson of the Management Board of Otbasy Bank, Lyazzat Ibragimova.
Because an Islamic mortgage, based on Sharia principles, cannot charge interest on the principal, the bank will explore ways to use the housing construction savings system to purchase housing in accordance with Islamic guidelines.
Otbasy Bank also signed a memorandum with CSQlaw Kazakhstan Branch, a Malaysian company operating in Kazakhstan. Under this cooperation, the company will organize comprehensive training in Islamic finance and the fundamentals of financial law in compliance with Sharia for Otbasy Bank employees, thereby enhancing their professional knowledge in Islamic financial law and broadening their expertise. As a result, new clients will receive high-quality services aligned with Islamic requirements, enabling them to address their housing needs.
