Issues and challenges of participation banking in Turkey : an empirical investigation

Abstract EN

The purpose of this paper is to provide empirical analysis of the issues and challenges faced by the participation banks in Turkey, based on the perception of employees of these banks.

The study focuses on factors that constrains growth of participation banking in the financial sector.

These factors have been arranged in six categories: (i) legal and regulatory framework, (ii) management issues, (iii) Sharīʿah(1) governance, (iv) industrial issues, (v) the perception of society, (vi) and risks.

The survey study has flagged the lack of legal regulations (i.e., an enabling environment), and the failure to implement Sharīʿah standards as the main challenges.