Türkiye targets top five in global participation finance

Türkiye is seeking to secure a place among the world’s top five participation finance economies, Treasury and Finance Minister Mehmet Simsek said during the Participation Finance Summit held at the Istanbul Financial Center. Stressing the country’s growing influence in Islamic finance, Simsek noted that Türkiye has already entered the global top 10 and aims to move higher under the leadership of President Recep Tayyip Erdogan.

Participation banking expands in Türkiye

Speaking at the summit organized by Anadolu, Simsek said participation finance has become an increasingly important pillar of the Turkish banking sector over the past two decades. He explained that the share of participation bank deposits climbed from 3% to 11%, while total assets rose from 2.4% to nearly 10% during the same period.

Loan growth in the sector also accelerated, increasing from 4% to 8%, according to the minister. Simsek argued that participation finance institutions continue to outperform conventional lenders in several areas, including capital strength, profitability, and asset quality.

Global Islamic finance market grows rapidly

The minister stated that global participation finance assets are expected to approach $10 trillion by 2030, compared with nearly $6 trillion recorded in 2024. He described the sector as more resilient against volatility and capable of meeting rising international demand for alternative financial systems based on risk-sharing principles.

Simsek also emphasized that participation finance should not be viewed solely through banking activities. He called for broader development in areas such as insurance, investment funds, and financial technologies linked to Islamic finance principles.

Istanbul positioned as global finance hub

Türkiye is also working to strengthen the role of the Istanbul Financial Center as an international hub for participation finance. Simsek said the government will continue supporting regulatory reforms and market expansion efforts aimed at attracting regional and global investors to Istanbul.

The summit brought together banking executives, policymakers, and international finance representatives to discuss the future of participation banking and Türkiye’s role in the evolving global financial system.

Energy diversification shields economy

Addressing global energy concerns, Simsek said Türkiye has significantly diversified its oil and natural gas suppliers, reducing vulnerability to disruptions in the Strait of Hormuz. He noted that the Turkish economy now has minimal direct dependence on the strategic waterway despite ongoing regional tensions.

The minister acknowledged that fluctuations in global oil prices could affect Türkiye’s Medium-Term Economic Program but stressed that authorities are taking measures to preserve economic stability. He pointed to strong macroeconomic indicators, including a budget deficit ratio of 2.9% and public debt levels around 24% of national income.

Foreign reserves and markets strengthen

Simsek also highlighted the improving position of the Central Bank of the Republic of Türkiye, saying gross reserves increased from $100 billion to $166 billion. According to the minister, the reserve level now covers more than five months of imports, providing protection against external financial shocks.

He added that the market value of companies listed on Borsa Istanbul recently climbed from $425 billion to $516 billion, reflecting growing investor confidence in Türkiye’s financial markets and economic outlook.