Türkiye focuses on participation finance growth

ISTANBUL

Türkiye is prioritizing participation finance as global cooperation plays a key role in the growth of participation finance worldwide, the head of Türkiye’s Investment Office told Anadolu.

Participation finance is a financial approach that promotes shared risk and reward between parties, emphasizing ethical and interest-free transactions.

On July 10-11, Türkiye’s Investment Office held a forum on the future of participation finance with the Malaysia International Financial Center Leadership Council, with more than 20 financial representatives from regulatory and supervisory institutions, Islamic banks, and capital markets participating in the forum.

Türkiye’s Investment and Finance Office President Ahmet Burak Daglioglu stated that potential cooperation between Türkiye and Malaysia can achieve a higher trade volume, which currently stands at a little over $5 billion.

“We know that Malaysia made significant investments in Türkiye over the years, as these investments stand around $1.5 billion currently, while similarly, Turkish firms are also investing in Malaysia,” he said.

Daglioglu noted that international cooperation has become key for the development of participation finance in Türkiye, and the sector reached a certain volume through close cooperation with Gulf countries.

“We know that many sector professionals in Türkiye received training in Malaysia, but we expect there’s still room for growth in increasing the investor base here,” he said. “We believe we can develop participation finance, participation banking, participation insurance, and participation capital market products with cooperation by inviting a broad delegation from Malaysia.”

Daglioglu shared that some estimates show there is nearly $4 trillion in participation finance stock around the world, or over $5 trillion according to other estimates, accounting for roughly 1% of the global financial system, with rapid increases expected.

“The principles and operating mechanisms of participation finance offer solutions to the problems of the global financial systems — the fundamental principles of participation finance are ethics, sustainability, inclusivity, and avoiding excessive risk,” he added.

Daglioglu reiterated that the forum aims to strengthen cooperation between Türkiye and Malaysia to promote the growth of participation finance.

“We wanted to tell the Malaysian side about our country, the participation finance sector, and the Istanbul Financial Center to attract more investments,” he said.