ISLAMIC FINANCE AND ITS IMPACT ON THE ECONOMY OF UZBEKISTAN

Abstract

Islamic finance and its impact on the economy of Uzbekistan has emerged as a significant area of study, particularly in the context of the country’s ongoing economic reforms and its integration into the global financial system. This research explores how Islamic finance principles, which emphasize risk-sharing, ethical investments, and asset-backed financing, contribute to sustainable economic development in Uzbekistan. The study examines the regulatory framework established by the government to promote Islamic banking and finance, including recent legislative changes aimed at attracting foreign investment and enhancing financial inclusion. Furthermore, it analyzes the role of Islamic financial institutions in providing alternative funding sources for small and medium-sized enterprises (SMEs), which are crucial for job creation and economic diversification. By assessing empirical data on growth rates, investment patterns, and social impacts, this research highlights both the opportunities and challenges faced by Islamic finance in Uzbekistan. The findings suggest that while there is considerable potential for Islamic finance to bolster economic growth and stability, effective implementation of regulatory measures and public awareness campaigns are essential for maximizing its benefits.