The first islamic card was launched in Kazakhstan

Al Saqr Finance company, the former conventional leasing company having a work experience more than 17 years on the market was converted a year ago to the universal Islamic financial organization providing a wide range of Islamic financial services to the clients. The strategic decision to convert to the Islamic financial organization by own forces is an unprecedented case in the Kazakhstan market. Thanks to professionality and the adjusted actions of the Company team the process of converting of a leasing company to the universal Islamic financial organization was performed in a record time.

Following the results of 2016 JSC Al Saqr Finance entered to a top of 5 leading leasing companies of Kazakhstan according to RAEX rating agency (Expert RA Kazakhstan). The Company made the first transactions corresponding to the principles of Islamic financing in the first months of this year. As a sharia board was chosen the Shariyah Review Bureau Company (Bahrain) which is a world leader in consulting on the principles of Islamic financing and it is represented in 12 countries.  

The world market of Islamic financing is rather big and makes nearly $2 trillion for the present day. Possibilities of Islamic banking are not only used in the conventional Muslim countries, but also in Europe and Asia. First of all, it is caused by resistance of the industry to the global financial crises. The peculiarity of Islamic financing is conduction of transactions on the basis of real assets, separation of risks, prohibition on a loan interest and on the certain sectors of economy which do not correspond to the principles of Sharia.

The interest in Islamic finance grows every year and in Kazakhstan also. So, one of the main directions of a strategic development of the Astana International Financial Center "Astana" (AIFC) created by the initiative of the head of state is Islamic financing. In particular, development of Islamic banking and non-banking financial services, Islamic capital market. Complete functioning of AIFC is planned at the beginning of 2018 then the consolidation of Islamic financial institutions on the platform of the international center is also planned. In this connection, AIFC positions itself as the platform of Islamic financing in the CIS.  

The world market of Islamic financing is rather big and makes nearly $2 trillion for the present day. Possibilities of Islamic banking are not only used in the conventional Muslim countries, but also in Europe and Asia. First of all, it is caused by resistance of the industry to the global financial crises. The peculiarity of Islamic financing is conduction of transactions on the basis of real assets, separation of risks, prohibition on a loan interest and on the certain sectors of economy which do not correspond to the principles of Sharia.

The interest in Islamic finance grows every year and in Kazakhstan also. So, one of the main directions of a strategic development of the Astana International Financial Center "Astana" (AIFC) created by the initiative of the head of state is Islamic financing. In particular, development of Islamic banking and non-banking financial services, Islamic capital market. Complete functioning of AIFC is planned at the beginning of 2018 then the consolidation of Islamic financial institutions on the platform of the international center is also planned. In this connection, AIFC positions itself as the platform of Islamic financing in the CIS.  

At the same time, according to the report of National bank of the Republic of Kazakhstan "Kazakhstan Islamic Finance 2016: a new frontier for Islamic finance", 45,6% of respondents (from which 33% - not Muslims) would like to use services of the Islamic financial organizations; 28% of respondents are interested in acquisition of housing by means of a mortgage; 11% - in car loans and 11% - in financing of small and medium business.

At the same time the domestic market of Islamic financing is provided by only several Islamic financial organizations offering services to business clients.

Considering the above and also following strategic objectives, Al Saqr Finance enters the retail market and plans to secure own position in this segment. Today among the most widespread banking services is the card service. In this connection the Company has chosen the payment cards complying the Sharia principles as a pilot project in retail financing. 

Having made the decision on release of the first Islamic payment cards, the team of JSC Al Saqr Finance started search of the bank partner for creation of the unique co-brand project. The choice fell on the best Digital bank of 2017 in Kazakhstan – JSC Bank of Astana - progress of which is noted by the authoritative edition Global Finance on an equal basis with such global financial institutions as HSBC, CITI, DBS, Standard Chartered and others. Today Bank of Astana issued more than 450 000 cards. JSC Bank of Astana fully supported the offer of Al Saqr Finance. Thus, time from the idea and the project implementation occupied few days.

As a result of partnership with JSC Bank of Astana, the Company created the Kazakhstan's first payment cards in traditions of Islamic banking. The main distinctive feature of this product is the full compliance to the Sharia principles.

Source: forbes.kz