Türkiye expands role in global participation finance market

Türkiye is gaining greater prominence in the global participation finance industry, with officials pointing to rapid growth in Islamic banking assets, stronger financial infrastructure, and expanding international cooperation. Speaking at the Participation Finance Summit in Istanbul, Turkish Vice President Cevdet Yilmaz said participation finance has evolved into a worldwide economic model built on risk-sharing, production, and support for the real economy.

Türkiye climbs in Islamic finance rankings

Addressing the summit at the Istanbul Financial Center, Yilmaz stated that Türkiye significantly improved its standing in the Islamic Finance Development Index, rising from 23rd place among 82 countries in 2012 to 10th among 140 countries by 2025. He noted that the country currently holds nearly $127 billion in Islamic finance assets, placing it among the leading markets globally.

Yilmaz emphasized that participation finance is no longer limited to Gulf countries or Muslim-majority economies. Financial hubs including Malaysia, Indonesia, the United Kingdom, Luxembourg, Hong Kong, and Singapore have increasingly adopted participation-based financial systems through new regulations and specialized market structures.

Global Islamic finance market continues to grow

According to Yilmaz, global Islamic finance assets expanded from $2.5 trillion in 2018 to nearly $6 trillion in 2024 and are projected to approach $9.7 trillion by 2029. He said Türkiye aims to strengthen its role in this expanding ecosystem through investment products, sukuk issuances, digital banking, and broader financial diversification.

The vice president also highlighted the importance of lease certificates, known as sukuk, which Türkiye first introduced domestically in 2012. Since then, these instruments have become a regular component of the country’s participation finance strategy and liquidity management system.

Participation banking sector gains momentum

Mehmet Ali Akben, head of the Participation Banks Association of Türkiye (TKBB), said the sector currently operates through 11 participation banks across 1,506 branches with more than 22,000 employees nationwide. He revealed that total banking assets in the sector reached 4.3 trillion Turkish liras by March 2026, while net profits climbed to 86 billion liras at the end of last year.

Akben said sustainable balance sheets, digital transformation, and customer-focused banking services have accelerated growth in the industry. He also noted that both public and private institutions are playing a larger role in expanding participation finance instruments in Türkiye.

International institutions back Türkiye’s strategy

International representatives attending the summit underlined Türkiye’s growing importance in the Islamic finance landscape. Ambassador Sohail Mahmood, secretary-general of the Developing-8 Organization for Economic Cooperation, said participation banking in Türkiye is advancing rapidly and becoming more visible within the global economy.

Officials from the International Finance Corporation, part of the World Bank Group, also expressed support for Türkiye’s participation banking sector. IFC representatives said they are working with several Turkish participation banks through trade finance programs and welcomed the sector’s modernization efforts and increasing international integration.