– Kompanion Invest: Development of Islamic Financing in Kyrgyzstan

What is Islamic financing and what niche does it occupy in our country? Many nationals of our country might have wondered about that. Let’s clear it up together.

The conventional concept of financing is about banks and financial institutions working only with credit and monetary instruments. Islamic financing, instead, does not recognize money as a subject of sale (except in some special cases). Money does not have its own value, it is only a means of exchange.

Challenges of Islamic financing sector

Despite the already existing fundamental theoretic and practical bases for future Islamic financial institutions, there are still some challenges in the development of Islamic financing: immature scientific environment for Islamic socioeconomic relationship (muamalat), weak legal and regulatory framework, as well as lack of skilled professionals.  

Kompanion Invest MCC LLC: Background

Kompanion Invest MCC LLC was established in November 2011. In 2012, Kompanion Invest conducted its first Murabaha agreement transaction. In November 2013, the Company became one of three finalists of the international competition Islamic Microfinance Challenge 2013. In 2016, after completing the process of implementing Sharia standards, Kompanion Invest fully switched to Standards of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

In April 2017, Kompanion Invest MCC LLC raised long-term financial investments from Deutsche Bank, the largest German Bank in terms of total assets. The investment agreement was signed on April 21, 2017. The agreement is in full compliance with Sharia standards. The main purpose is to support microfinance products and services that are consistent with the Islamic law. The funds were provided as part of Deutsche Bank’s New Initiatives Fund project that provides accessible financing to low–income clients in developing countries.

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