“Institutional traps” in the Islamic finance development: the experience of Kazakhstan
Sagiyeva R. Kuanova L. Ryskulov A. Stambakiyev N. Doszhan R.
2025Emerald Publishing
Journal of Islamic Marketing
2025
Purpose – The article aims to study the formal and informal institutional factors that create unique “institutional traps” hindering the development of Islamic finance in Kazakhstan. The relevance of the issue lies in the fact that 70% of the country’s population professes Islam, and Kazakhstan became the first country in Central Asia to establish a legal framework for Islamic finance. However, the practical distribution of these services remains limited. The paper explicitly formulates the research objectives: (1) to identify formal and informal institutional barriers; (2) to analyze how these barriers evolve into systemic “institutional traps”; and (3) to propose theoretical and practical contributions for overcoming them. Design/methodology/approach – The authors used a comprehensive qualitative approach. First, an analysis of the evolution of formal and informal institutions related to Islamic finance in Kazakhstan is carried out based on literature data and institutional analysis. Secondly, empirical qualitative data were collected through semi-structured, in-depth interviews with imams (mosque ministers) who interact directly with the Muslim population on charity and financial practices. Interpretive phenomenological analysis was used to interpret informal institutional factors, thereby revealing the subjective perceptions and experiences of the participants. Additionally, network analysis was used to process the interview data. After encoding responses on key themes, a theme adjacency matrix was built and visualized using the Gephi and Cytoscape programs in Python. This approach has enabled the identification of clusters of interrelated concepts and enhanced analysis reliability through a combination of qualitative and quantitative visual methods. Findings – The study revealed several systemic problems: weak and inconsistent state support, low awareness among key stakeholders and a persistent gap between formal institutions and informal practices. The absence of trust and horizontal linkages between the Islamic finance sector, religious institutions and society reinforces “institutional traps.” Research limitations/implications – Possible limitations stem from the qualitative nature of the research. Nevertheless, the findings were triangulated with literature and validated by multiple analysts. Future research should expand this framework through comparative studies across Central Asia, use mixed-methods approaches and explore emerging domains, such as Islamic fintech and sukuk markets. Originality/value – For the first time, the focus of analysis turns to mosque imams as agents of Islamic finance ideas and carriers of informal norms. This paper presents a novel bottom-up perspective, expanding knowledge beyond regulatory and informational barriers to encompass socio-psychological attitudes and digitalization, making contributions both theoretically and practically.
Cognitive dissonance , Formal and informal institutions , Institutional traps , Islamic finance , Kazakhstan , Phenomenological analysis , Socio-cognitive factors
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Department of Finance and Accounting, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Higher School of Economics and Business, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Al-Farabi Kazakh National University, Almaty, Kazakhstan
Egyptian University of Islamic Culture Nur-Mubarak, Almaty, Kazakhstan
Economic Research Centre, Al-Farabi Kazakh National University, Almaty, Kazakhstan
Department of Finance and Accounting
Higher School of Economics and Business
Al-Farabi Kazakh National University
Egyptian University of Islamic Culture Nur-Mubarak
Economic Research Centre
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