The use of Islamic finance in the development of agriculture in Azerbaijan
Abstract. Currently, in the inclusive development of national economies, along with traditional sources of financing for agriculture, Islamic financial instruments are also used. Thus, the demand for this mechanism, currently known as interest-free financing and considered the main type of alternative financing, is growing in both Muslim and non-Muslim countries. In recent years, the use of innovative financial resources in the development of the agricultural sector has been in the sphere of interests of participants in the Islamic financial ecosystem - the Ministry of Economy and various subordinate institutions (COBIA, the Entrepreneurship Development Fund), the Central Bank, commercial banks, investment companies, etc. The adoption in January of this year of the decision of the Cabinet of Ministers on the approval of the Regulation on the application of a special regulation regime giving the green light to the use of Islamic financial instruments shows that the use of this mechanism is appropriate and is becoming increasingly relevant. The article investigates the importance of using Islamic financial instruments as an alternative source of financing in the development of agriculture in Azerbaijan. The paper presents in detail the purpose, objectives, applied methods and the results of the study. The latter indicate that Islamic financial instruments can play an important role in creating sustainable financing in agriculture and open up new opportunities for the development of this sector.
Keywords: Islamic finance, agriculture, alternative sources of financing, non-oil sector, sustainable development, financial instruments, inclusive development, specialized institutions.
Highlights:
- Islamic financial instruments can overcome the lack of finance in agriculture;
- Islamic financial instruments ensure the sustainable development of the agricultural sector;
- a legal and institutional framework should be created for the application of Islamic financial instruments in Azerbaijan.
NatigS. Mirzoev - Lankaran State University, Lankaran, Azerbaijan, Mashallah R. Safarov - Baku State University, Baku, Azerbaijan