Turkey’s participation banking industry has been going through a successful period as of August this year, said Osman Akyüz, secretary-general of the Participation Banks Association of Turkey (TKBB).
Akyüz’s remarks came on the sidelines of the third Turkey 2023 Summit, organized by Turkuvaz Media Group’s Sabah daily and broadcaster A Para on Thursday.
Akyüz said compared with the end of 2019, the total assets of the participation banks in Turkey have increased by 45.1%, exceeding the growth of the conventional banking sector, reaching TL 412.6 billion ($51 billion).
“Equities have reached TL 26.6 billion and have posted an increase of 22.5% compared with year-end. The participation banking sector has made a profit of TL 2.9 billion in the first eight months of the year,” he added.
Some 33.5% of the TL 217.33 million financing the participation banks went to small- and medium-sized enterprises (SMEs), Akyüz noted. “This, in turn, reveals the tight relationship of participation banks with the real sector," he said, adding that the sector aims to develop new products and services that will fulfill the needs of the SME sector.
He added that they have completed many projects that were included in the TKBB’s 2015-2025 Strategy Document, by working in coordination with the responsible stakeholders in areas of legislation, product variety, education and communication.
Besides, Akyüz continued: “As a result of the work carried out with the relevant public authorities, the legislative infrastructure of many products unique to participation banking was reconstructed.”
He said that Islamic finance research centers were opened at universities to create the academic knowledge and human resources needed by the sector.
Akyüz stressed that a series of works have been done to improve the banks' functions and operations and enhance awareness of participation banking. He added that the TKBB is set to review the latest developments and achievements in the sector to craft a new strategy document to accomplish 2025 targets.
He added that a textbook titled “Living and Developing Participation Banking” was also prepared and is aimed at explaining the sector’s place in the country in the best way. The work was prepared to be presented to universities for undergraduate and postgraduate studies.
"The book, with its 32-person writer staff consisting of practitioners and academics, explains the basic principles, ecosystem, legislative and legal infrastructure, contracts, organizational structure and corporate management, money and capital market products, Islamic insurance system, risk management, accounting practices of participation banking and its role in development,” Akyüz said.