Zaman Bank, Kazakhstan’s Islamic bank, rolled out its first retail product this year — unsecured Islamic consumer loans with a maximum loan amount of 3 million tenge (about $5,500) — while progress on Islamic mortgages remains to be seen, according to the bank’s CEO Gulfairuz Assayeva.
Notably, the bank made headlines in November 2024 when a test payment was successfully processed between Zaman Bank and Afghanistan’s Ghazanfar Bank, marking the first financial transaction since Kazakhstan removed the Taliban from its list of terrorist organizations in late 2023.
Islamic loans
Assayeva said that within two months, the bank issued more than 300 loans totaling about $2 million after receiving roughly 17,000 applications.
She attributed the low approval rate to a rigorous credit-scoring process that considers applicants’ debt-to-income ratios and other financial indicators. In addition to the standard screening, loan decisions are also reviewed by the Sharia Council and the bank’s Board of Directors.
Islamic mortgages
Progress on launching Islamic mortgages has been gradual, Assayeva said, primarily due to unresolved value-added tax (VAT) issues.
Under Islamic financing principles, the bank purchases the apartment and later transfers ownership to the client. This structure creates a double-taxation problem.
«When the bank buys the apartment, we pay VAT. Then, when we sell it to you — and you’re not a VAT payer — the bank must pay VAT again,» Assayeva explained. «Can you imagine how much that would increase the final cost? We’re trying to resolve this through constructive dialogue because otherwise, entering the market with a mortgage product would be impractical. It would make housing prohibitively expensive for consumers.»
VAT exemptions
Currently, construction companies in Kazakhstan are exempt from VAT when selling apartments. However, those exemptions will expire on Jan. 1, 2026, under the country’s new Tax Code.
Additionally, Kazakhstan’s VAT rate is set to rise from 12% to 16% in the new year, which would make Islamic mortgages even more costly for borrowers.
As of May 2025, Zaman Bank planned to introduce its Islamic mortgage product by the end of 2025. Al Safi Bank, another Islamic financial institution registered with the Astana International Financial Centre (AIFC), also announced plans to launch a similar mortgage program.
