The Islamic finance in Russia: when will the word "experiment" go away

On September 1, 2023, an experiment on partnership financing was launched in Russia. Two years later, Tatarstan, one of the four pilot regions, became the leader, holding 84% of all operations for the placement of funds. TatCenter experts discussed the reasons for the region's success, new financial products and prospects for exiting the "experiment" mode.

Why is Tatarstan in the lead?

Despite the fact that Tatarstan, Bashkortostan, Dagestan and Chechnya participate in the experiment under identical legislative conditions, the results of the republic stand out. By the end of 2025, the volume of capital raised increased 6-fold, reaching almost 35 billion rubles. Of the 37 organizations in the federal register, 16 operate in Tatarstan.

"The fact that Tatarstan occupies a leading position today is the result of a combination of three factors. The first is the attention and consistent support from the RAISA of the republic. The second is the systematic work of the Ministry of Economy. And the third is the high activity of the market participants themselves, who are ready to implement the tools in practice. This is a synergy, not the result of special benefits," explains Rustam Sagdeev, CEO of Amal Financial House.

Airat Farrakhov, a deputy of the State Duma of the eighth convocation of the Russian Federation, adds that the republic's peculiarity is the presence of a clear "roadmap". Due to transparency, Tatarstan is now perceived as a key instrument for implementing the principles of partnership financing in Russia.

AAOIFI and international trust

The main achievement of the current stage has been integration into the global financial system. On December 26, 2025, the Representative Center of AAOIFI, the international organization for Standardization of Islamic finance with headquarters in Bahrain, opened in Kazan.

"Every year, Bahrain hosts a conference on Islamic finance, where global experts gather. In November 2025, it was held for the twentieth time. Tatarstan has participated in this event for many years, first as a listener, then as an expert. And already at the twentieth conference with the participation of Rustam Minnikhanov, President of the Republic of Tatarstan, negotiations were held with Sheikh Ibrahim bin Khalifa Al Khalifa, where we asked for expert assistance and took the initiative to open a branch office for Russia and CIS countries, for which we received full support," Taliya Minullina, head of the Investment Development Agency of the Republic of Tatarstan, tells the background of the event.

The opening of the center has significantly increased the confidence of foreign investors in Russian projects. Amer Omar Abdelaziz Nader, Head of the Center for the Promotion of Islamic Finance (AAOIFI), emphasizes that Tatarstan is positioned as Russia's bridge to the Islamic world — a practical center for project implementation with an emphasis on long-term investments, the development of SMEs and the real sector.

"Tatarstan has become the only site in Russia where the AAOIFI branch is represented. The experiment has become a tool for integration into a system whose volume in the world is estimated at trillions of dollars," adds Rustam Sagdeev.

Taliya Minullina adds that a working group is being formed jointly with the Russian Ministry of Finance and the National Bank to adapt world standards to the Russian way.

KazanForum: a platform for dialogue with the Islamic world

In 2026, the International Economic Forum "Russia — the Islamic World: KazanForum" will be held for the seventeenth time. Over the years, a professional community of like-minded people has formed, whose efforts are aimed at the joint implementation of projects using the mechanisms of Islamic banking.

The forum platform unites key organizations of the Islamic financial world: AAOIFI, the Islamic Development Bank, CIBAFI (General Council for Islamic Banks and Financial Institutions), relevant departments of Malaysia and Qatar. The dialogue with high-level professionals is maintained, among other things, due to Tatarstan's reputation as a reliable partner and the activity of the regional leadership.

In 2026, the forum will again host AAOIFI sessions on Islamic bonds, sukuk and the implementation of this instrument in the CIS countries.

Which tools will become a priority

Experts predict a transition from one-time transactions to a large-scale ecosystem. According to Amer Omar Abdelaziz Nader, in the coming years, the following will come to the fore:

Sukuk and project tools provided by infrastructure and assets;

Funds that comply with Sharia principles;

Structured partnership tools for SMEs;

Fintech-based investment platforms.

Special attention is paid to the "digitalization" of ethical finance. Marat Yusupov, Director of Golden Chest LLC and Chairman of the Association of Partner Financing Organizations, calls digital sukuk and digital mudaraba breakthrough mechanisms:

"Digital sukuk are "Islamic bonds" that certify ownership of a real asset, which makes it possible to attract capital directly from investors for specific production tasks. Digital mudaraba is a partnership through a digital platform that allows SMEs to receive financing without collateral."

The field of partner finance is now penetrating into various industries, for example, the private medicine of Tatarstan. Medicines produced according to Halal standards arouse more consumer confidence and have export potential. Financing of medical projects was carried out by market participants even before the start of the state experiment, and with the support of partner tools, projects of dental clinics, diagnostic centers and private polyclinics were implemented.

Advantages of partner financing:

Predictability: The transaction price is fixed and is not tied to fluctuations in the Central Bank's key rate.

Asset-based: Financing is focused on a specific product, machine tools, or real estate.

No late fees: The Islamic model prohibits penalties and interest on interest, which reduces the risk of a debt pit.

Skyline 2028

Extending the experiment until September 1, 2028 was a strategic step. The first stage was devoted to setting up the infrastructure, the second will be the scaling stage. So far, the need to adapt banking business models and the distrust of the real sector in information disclosure have hindered the mass launch. Ilnur Sadrtdinov, Director of Ijara-Leasing, also draws attention to the lack of uniform standards, the need to refine tax regulation and improve financial literacy of the population. In his opinion, scaling will be difficult without solving these issues.

Key indicators of Tatarstan's dynamics:

Volume of funds raised: 34.9 billion rubles (6-fold increase by 2024)

Number of products: more than 14 thousand (an increase of 2 times by 2024)

Market participants provide data from their portfolios. Rustam Sagdeev notes that the dynamics of the Amal Financial House reflects the strengthening of investor confidence. The company's investment portfolio grew by 27%, and the portfolio of financed transactions grew by 17%. Ilnur Sadrtdinov adds data on leasing. The portfolio of Ijara contracts as of January 1, 2026 amounted to 1,142 billion rubles.

What awaits the market in the next two years, according to experts:

Sukuk development: Islamic investment certificates can become an alternative to bonds for financing large infrastructure projects

Digitalization: Launch of digital financial assets (CFAs) based on mudaraba

Infrastructure: Formation of a single certification body and deepening work on standards

Legislation: Formation of a unified federal legislative framework

Going beyond the pilot: The expansion of the experiment to the entire territory of the Russian Federation is being discussed.

The main result by 2028 should be the formation of a unified legislative framework at the federal level. Experts are confident that in the future the term "experiment" will disappear, and partner financing will become a natural part of the Russian financial market.

"The ideal solution would be to remove all barriers and expand the experiment to the whole country. I am sure that in the coming years we will move away from the word "experiment", and it will become an integral part of the Russian financial market," concludes Airat Farrakhov.

Anastasia Sorokina

The material was prepared based on the results of the online conference "Islamic Finance: the course of the experiment and the role of Tatarstan in promoting partnership financing."

Link to the material: https://tatcenter.ru/rubrics/mneniya/islamskie-finansy-v-rossii-kogda-ujdet-slovo-eksperiment/