The Central Bank of Uzbekistan has approved a regulation enabling microfinance organizations (MFIs) to offer Islamic finance services. The new guidelines, published on Lex.uz, provide a framework for MFIs to engage in various Islamic finance activities while ensuring compliance with regulatory standards.

Under the new regulation, MFIs are authorized to offer the following Islamic finance products:

Mudarabah: Investment in a business with profit-sharing arrangements.
Murabaha: Structured financing for purchases paid in instalments.
Musharakah: Collaborative partnership with shared profit and loss.
Salam: Advance payment financing for goods or services.
Islamic leasing: Lease financing compliant with Islamic principles.

To deliver these Islamic finance services, MFIs must establish a dedicated board responsible for overseeing Islamic finance operations. This board must consist of at least five members elected by the general meeting of founders or shareholders. The board members should be certified in Islamic finance, with at least one holding a higher education degree in Islamic law. Additionally, specialists may be contracted for advisory roles.

MFIs providing Islamic finance must maintain separate accounting records for these services. The regulation specifies that funds cannot be used for the purchase of foreign currency, crypto-assets, gold, or silver under Islamic finance arrangements.

In May, Bekhzod Khamrayev, Deputy Head of the Central Bank, announced at a Senate meeting that a draft law concerning Islamic financial services is anticipated to be presented for review by year-end. Additionally, he mentioned that the Central Bank has developed a draft regulation to support the adoption of Islamic finance practices.