ISIL-KP Financing
Updated 15 April 2025
Earlier this year, the latest UN ISIL and Al-Qaeda monitoring report highlighted that ISIL-KP represents the “most serious threat to the de facto authorities, ethnic and religious minorities, the United Nations, foreign nationals and international representatives in Afghanistan” and poses the greatest extra-regional terrorist threat.
Although some have previously suggested that ISIL-KP is “starved financially”, the group has reportedly improved its financial and logistical capabilities. ISIL-KP continues to conduct attacks in Afghanistan, challenging the Taliban’s consolidation of control. It also claimed responsibility for January 2024 Kerman Bombings and the March 2024 Moscow Crocus City Hall Attack.
This article provides an update and overview of the group’s financing activities. This analysis was originally written for my book, Illicit Money: Financing Terrorism in the 21st Century, but has been updated and is current to April 2025.
Last updated 15 April 2025
Raising Funds
In Afghanistan, ISIL-KP clashes with the Taliban in terms of funding and resources. ISIL generated the majority of its funds from taxing and extorting the local population in its area of control and influence, from donations from ISIL core and wealthy donors, and from identity-based support networks, as well as kidnapping for ransom. Tax rates vary, ranging between 10% and 15% depending on whether the economic activity is legitimate or illegal. This control / influence can be fleeting, and does not depend on ongoing territorial control (although that is certainly desirable from the group’s perspective). This taxation / extortion activity includes control of mining sites, including talc, chromite, precious and semi-precious stones as well as agriculture. Prior to being taken over by ISIL-KP, the mining sites had been held by the Taliban who profited from them, but did not mine them directly. The group is also reported to raise funds from timber smuggling
Kidnapping for ransom has further served as a revenue source for the group. In 2018, three men were arrested in Karachi for conducting 5-6 kidnappings and sending the money to ISIL-KP through hundi and hawala networks, as well as through bank accounts used to transfer funds to Afghanistan. The Islamic State earmarked the funds to conduct terrorist attacks in Pakistan. Estimates from 2015 and 2016 suggest that the group is able to generate between $300 and $350 million in revenues from this activity, but this is largely dependent on the territory they are able to control / extort, and is therefore highly variable.1 The group is believed to have suffered unspecified financial losses in 2020 likely related to counter-terrorism operations and reduction in territory (specifically in southern Nangarhar).