Turkey Interest-Free Financial Literacy Research Report is Released

Oct 9, 2020, 15:25 PM by İsmail Aktaş
Developed in cooperation with the Participation Banks Association of Turkey (TKBB) the research project has been created with the contributions of Istanbul Sabahattin Zaim University students.

Developed in cooperation with the Participation Banks Association of Turkey (TKBB) the research project has been created with the contributions of Istanbul Sabahattin Zaim University students.

About the Interest-Free Financial Literacy Research Project

Interest-free financial literacy appears before us as one of the fundamental nourishing concepts of sustainability, development, and high prosperity of humanity. Even though it is the essential goal of the needed financial inclusion to carry the flag of interest-free financial literacy concept and to ensure its spread, the alternative choices were dwelt on, and the society could not be convinced sufficiently from the relevant angle. Thereupon, today’s economy of Turkey is in the need of progress in various fields such as reassurance of capital constellation, development of healthy funds transfers mechanisms, and provision of financial diversity.

Besides the mentioned problems, Islamic financial literacy studies come to the fore as an endeavour which will contribute to the solution of general problems like dollarization. For example, it is assumed that the society is drawn into dollarization as a reflex to avoid interest, that is, when the modern architectural structure of Islamic finance become more comprehensible by the majority, the importance of these kinds of problems will decrease and also the needs of economy from financial sector will be met healthily.

Even though there is a developing literature on the subject, the responsibility of contacting the public in the means of Islamic financial literacy is a burden on the Islamic financial institutions. Even the prepared reports and the academic researches that are expected to be developed in this field are mostly followed under the responsibility of the institutions and related organisations. Moreover, a constant atmosphere of disinformation and destructive criticism are fed against the strategies that locate Istanbul as a centre of Islamic finance. However, it is a time-consuming endeavour to produce institutional solutions to revitalize the existing social finance dynamics under the understanding of an arrangement that has internalized the capitalist paradigm. Nevertheless, efforts have been made upon the approximation of the applications of Islamic finance models that have achieved remarkable improvements and theoretical discussions.

Islamic finance models, whose first steps we have witnessed, will serve more strongly to the tomorrows of Turkey and the region than today. A way has been created with today’s analyses to reveal the Islamic financial models whose social qualities are in the forefront under the capitalist regulation paradigm. Participation finance practices, in which financial intermediation business and transactions are conducted not for the capitalist profit but for the benefit of participants, will expand the path that they have created and with the awareness of the solution they offer to the humanity they will settle in the position they deserve. It is possible to say that in this Covid-19 environment the constructive approach against the painful profit-oriented financial intermediation concept is about to change.

Humanity needs new perspectives and visions in terms of access to finance. The participation finance gains a successful practice experience which will be widely accepted from this angle. More studies need to be conducted in order to bring together the experience with the large segments of the society and to benefit from the facilities of the synergy that will arise. Turkey is advantageous on the point of being one of the most important centres of interest-free finance because it maintains a strong stance on the main demanded side of the two basic approaches in Islamic finance. These approaches can be summarized as development of market share and providing legal compatibility approaches. The market share development approach adopted by Malaysian and Gulf economies has been criticized for sacrificing the legal compliance. The possible highest legal compatibility approach followed by the major economies like Turkey, Pakistan, Sudan and Nigeria earns general approval on a global scale and at the same time draws attention to these economies.

In order to feature the role of Turkey and to locate Turkey as an autonomous centre of Islamic finance rather than as an agency of the centres in the West, it is important to reveal the Islamic finance literacy status within the economy because the main determinant that will build the centre is the internal environment of the economy which is the main factor in economic depth and volume. The interest-free financial literacy researches are essential for Turkey’s economy as to create data for both institutions and potential investors and researchers. The project that we are working on has set out to meet this need and has strengthened with the support of the Participation Banks Association of Turkey to ensure its continuity and institutionalism.

Policy recommendations that are developed on the findings are important in following the development of interest-free financial literacy of Turkey’s economy. We would like to mention the names of the professionals and scientists who made valuable contributions to the project idea; the deceased Prof Dr. Sabri ORMAN (besides his contributions to the project idea, our professor had a strong interest in the findings), Prof. Dr. Arif ERSOY (it is impossible to forget our professor’s contributions in the process and we carry his approach, as a legacy, to the continuation of the project in the coming years as well), Prof. Dr. Servet BAYINDIR, Prof. Dr. Ahmet TABAKOGLU, Prof. Dr. Ibrahim Guran YUMUSAK, Dr. Mehmet CETIN (our professor’s contributions in the development of the scale were invaluable), Dr. Rumeysa BILGIN, Dr. Ruslan (Adam) NAGAYEV, Rashed JAHANGIR, Mehmet CENGEL, Harun Sami CIFTCI, Mahmur ILBARS, and Erman SAHIN. Lastly, we would like to thank BETA Publishing managers and employees for their selfless contributions. We would like to remark that the public is the main addressee of this study. We respectfully present our report with the thought that we thus perform our obligation to the society’s need to know itself.