Islamic finance products create new opportunities for diversifying financing and expanding businesses' access to financial resources in Azerbaijan, Rabitabank CEO Aydin Huseynov said during the panel discussion titled “Enhancing Trade Solutions for Regional Connectivity” held within the framework of the Islamic Development Bank (IsDB) Group Annual Meetings in Baku, APA reports.
He noted that the bank he represents began cooperation with Islamic finance institutions in 2023.
“In 2023, we signed our first agreement worth $10 million with the International Islamic Trade Finance Corporation (ITFC) in Jeddah. Later, in 2024, we concluded another agreement with the Islamic Corporation for the Development of the Private Sector (ICD),” he said.
Huseynov noted that following this cooperation, the bank began developing Islamic finance products.
“In the initial stages, promoting and introducing the Murabaha product to the market was not easy. However, after several months, we achieved positive results,” he said.
According to him, Islamic finance creates alternative financing opportunities for banks.
“Some clients lack sufficient collateral, while others have limited access to traditional loans. Instruments such as supply chain finance, invoice financing, contract financing and Murabaha provide financing opportunities based on assets and contracts,” he noted.
The Rabitabank chief emphasized that the introduction of Islamic finance products also increases banks' access to international financial resources.
“Through these products, banks can attract funding from the Islamic Development Bank Group, ITFC, ICD and financial institutions from the Gulf countries. This helps diversify liabilities and reduce financial risks,” he said.
Huseynov stated that raising awareness has played an important role in the development of Islamic finance.
“We organized seminars for clients, explained the essence of Islamic finance and the advantages of the Murabaha instrument. We carried out extensive awareness and promotional activities in this area,” he said.
He added that the regulatory sandbox mechanism of the Central Bank of Azerbaijan has also facilitated the introduction of innovative products.
“We presented our Murabaha product to the Central Bank through this platform. After receiving approval, we began offering the product from April 1 of this year. Currently, Rabitabank is the first and only bank in Azerbaijan offering the Murabaha product on both the asset and liability sides,” he noted.
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