Participation banking

Participation banking is the name given to Islamic banks mainly in Turkey [1] [2] [3] [4] as well as MENA region and in other pan-Islamic countries. Beginning of the era 2000, while participation banks reach only 2%of the net assets, in 2010 the rate increased up to 4,3%. As a result of the momentum of high growth in the last 5 years, the rate increased up to 6, 1% with 90,7 billion TL asset in the third quarter of 2013. Although, regarding the profit margins of the participation banks, Malaysia, Indonesia and Gulf countries have more than 50% of the market share, it is stated that Turkey has more potential in growth. Also, Turkey, Pakistan, Bangladesh and Indonesia stand as the leading countries among the participation banks. [5] Saudi Arabia, the UAE and Malaysia are the three largest participation banking markets, in terms of assets. [6] Iran has 36% of the worldwide assets of the participation banks, Malaysia has 17%, Saudi Arabia has 14% and Turkey has 3,1% of the market share. According to EY’s ‘Banking in emerging markets’ report, the assets of global participation banking reached US$930b in 2015, with growth rates declining across all regions compared to previous years. [6]

List of participation banks

Defunct

References