SMEs and Islamic Factoring to Support Islamic Banking Sector’s Growth in Turkey

According to Harun Çelik, the Islamic Trade Finance Corporation’s (ITFC) Regional Head for Turkey, Turkey’s Islamic banking sector has grown at a 27% CAGR over the past fifteen years, compared to the 17% growth witnessed by the rest of the banking industry. The country has six Islamic banks at present, with Kuveyt Turk, Turkiye Finans and Albaraka Turk, Turk accounting for 75% of the Islamic banking sector.

The Islamic banking industry in Turkey, although growing, is still far short of its true potential. Ratings agency, Moody’s states that within Turkey, Islamic banks hold just a 6.0% market share. This is well below the 43% average recorded across Malaysia and the Middle East. Given that over...