Kyrgyzstan is positioning itself as a leader in Islamic finance within Central Asia, being the first in the region to issue Islamic certificates (sukuk). Khan Teniri Capital is leading the way in establishing standards for the issuance of Islamic securities and provides a comprehensive suite of services for companies interested in utilizing this method for financing.
Khan Teniri Capital can facilitate the issuance of various Sukuk formats in Kyrgyzstan, including:
- Islamic leasing certificates (Sukuk al Ijara), allowing for the use of leased assets.
- Islamic asset financing certificates (Sukuk al Istisna), for project or asset financing before the asset is available for use.
- Islamic investment management certificates (Sukuk al Mudaraba), representing a form of investment partnership.
- Islamic investment agency certificates (Sukuk al Wakala Bi Al Istithmar), where an agent is appointed to manage investments.
- Islamic partnership certificates (Sukuk al Musharaka), reflecting joint venture investments.
The issuance process involves a special purpose vehicle (SPV), termed ‘Islamic Special Finance Company,’ specifically created for this purpose and backed by the financing’s ultimate beneficiary, known as the ‘Originator’. According to Kyrgyz law, this Islamic Special Finance Company is required to solely focus on managing the securities issue for its duration.
Islamic certificates must comply with Sharia-based restrictions, such as avoiding fixed interest and investments in activities prohibited by Sharia. Despite these restrictions, Islamic certificates offer greater flexibility as a financing tool compared to traditional bonds and equity under Kyrgyz law, allowing for a wide range of business investment deals to be structured as Sukuk.