Microfinance, Pawnshop, and Factoring Companies in Uzbekistan to Offer Islamic Financial Products

Tashkent, Uzbekistan (UzDaily.com) — Microfinance and factoring organizations in Uzbekistan are now officially permitted to provide services under Islamic finance. The corresponding regulation was approved by the Central Bank on 20 October.

According to the document, companies may offer various types of Islamic financial services, including mudarabah (profit-sharing business financing), murabaha (installment-based purchase financing), musharakah (partnership with profit and loss sharing), salam (advance payment financing), and Islamic leasing.

Organizations are required to submit monthly reports to the Central Bank on the Islamic services they provide, as well as information on their assets and liabilities, transactions with affiliated parties, and significant risks.

In cases where an asset is deemed irrecoverable, it must be written off using reserves within three business days.

Furthermore, the capital adequacy ratio for such organizations must be at least 10 percent—the ratio of total equity to total assets. Previously, this requirement applied only to microfinance institutions; it now extends to pawnshops and factoring companies as well.