Initial concerns about the low number of participants in the Islamic finance experiment in four Russian regions — Tatarstan, Chechnya, Bashkortostan, and Dagestan — have proven unfounded. Today, this figure is growing, and the project itself has been extended until 2028. The introduction of partnership financing in Russia is driven by demand from the Muslim population and the search for new sources of capital amid sanctions pressure. Furthermore, this financial sector has significant socially important potential, as the history of Mit-Ghamr Bank clearly demonstrates.
Islamic banks have become a significant phenomenon in global finance over the past half-century. Unlike traditional financial institutions, their activities are governed by Sharia law, which prohibits interest (riba), uncertainty (gharar), and "sinful" activities, as well as mandatory risk sharing and the collateralization of transactions with real assets. Early attempts at Islamic banking were made in Pakistan and Malaysia in the mid-20th century, but the first such institution in the world is considered to be the Dubai Islamic Bank, which began operations in the 1970s. Savings banks in the small Egyptian town of Mit Ghamr hold a special place among these pioneers.
After graduating from Cairo University, Egyptian-born Ahmad al-Naggar defended his dissertation on investments in Cologne, Germany. Working at the local Kreissparkasse (meaning "District Savings Bank") inspired the young economist. His goal was to adapt this experience to the realities of the Egyptian countryside, where the poorest segments of the population — peasants, artisans, and the working class — had no access to banking services. The main obstacles were not only poverty and lack of collateral but also religious beliefs that forbade interest on loans. Soon, on July 25, 1963, the Mit Ghamr branch of the Local Savings Banks opened.
Beyond financial inclusion, al-Naggar sought to support budding entrepreneurs and instill a savings culture. The project was revolutionary: it was the first microfinance institution focused on social issues and responsive to Egyptian cultural sensibilities. Al-Naggar consciously emphasized savings to change people's economic behavior. In a climate where fatalism reigned due to the impossibility of long-term planning, he sought to foster individual responsibility for one's own destiny. According to the economist, the habit of thrift is "a method for shaping the Muslim personality." Traditions of conspicuous consumption — for example, expensive weddings — that encouraged people to spend rather than save posed a serious obstacle.
The savings banks' operations were based on four key principles. Locality: branches channeled funds into the development of their local communities — where depositors lived and worked. Universality: the bank opened its doors to everyone, offering not only standard savings accounts but also investment partnerships and zakat accounts, the sacred duty of every Muslim. But most importantly, interest, prohibited by Islam, was completely abolished. Usury was replaced by interest-free loans and fair profit sharing. Finally, a social mission: the bank was established as a grassroots development institution, at the initiative of local communities, not the state. Employees were required not only to understand finance but also to understand their social role.
As already noted, al-Naggar saw saving as a method for shaping the Muslim personality, possessing the qualities essential to Islam: moderation, prudence, foresight, the ability to plan for the future, and the ability to manage resources wisely. According to the economist, as outlined in his works, a focus on saving is, in essence, a solid foundation for building an Islamic society. When such behavior becomes a habit and embraces more and more people, the Muslim community is strengthened, and the number of those in need is reduced.
In Russia, the first signs of a socially oriented experiment in Islamic finance are visible. For example, halal debit cards from some major Russian banks not only exclude prohibited financial transactions but also restrict any transactions in areas deemed sinful by Sharia law. This means that holders of such accounts will not be able to purchase alcohol or place bets. It is noteworthy that in December 2025, at the opening of the first representative office in the CIS of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in Kazan, it was noted that Orthodoxy also condemns lending money at interest, demonstrating a close affinity with Russian traditions.
The savings banks in Mit Ghamr transformed into a genuine financial institution in just three and a half years: the number of their depositors soared from 17,500 to 251,000. The secret to these results is simple: people repaid their loans not because they were afraid of losing their collateral, but because they lived in a close-knit community where everyone knew each other. In such an environment, cheating a bank meant cheating one of their own. This experience of capital with a human face remains relevant today — it can inspire those seeking formulas for ethical and truly social finance.
Russian orientalist Renat Bekkin sees an important pattern in the story of Mit Ghamr: Islamic finance thrives only where there is political will. Success here depends on government commitment far more than on pure economics. In Russia, this logic has been borne out: the Islamic banking experiment not only launched but also received legislative support and was extended until 2028. Partnership finance has a future in our country — and, like Mit Ghamr, this Russian stage will go down in the history of ethical finance.
GSV "Russia - Islamic World"
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