Financial Inclusion in the Participation Finance System

The participation finance system appeals to a wider audience day by day in terms of its share in the general banking system in Turkey and increases the inclusion in terms of service continuity through intermediation to real transactions. 

BLOG 18.08.2021, 17:26
Financial Inclusion in the Participation Finance System

Benefits for Customers

Looking at the banking transactions from a holistic long-term service point of view, they have a significant place in increasing the welfare level of the society and protecting the financial structure. It is an indispensable model because of the solutions it brings to the needs of each individual as a requirement of individual and commercial life. From a global point of view, all financial transactions in trade require a safe, effective, and solution-oriented approach in this direction. All transactions required by the customers of the bank in this context include innovations in today's banking model. Through the right management, each individual and company actually regulate their financial flow and becomes able to make long-term plans. The important point here is that the service provided to the customers is carried out in a long-term and mutually beneficial manner. Otherwise, solutions that save the day may lead to the destruction of many homes and irreversible problems in families, which are the core of the society, in the medium and long term.

Approaches of Banks

It is known that customer-oriented services in conventional banks meet financial expectations but also bring many negative sanctions and financial problems when long-term savings and return plans are not managed correctly. Nevertheless, due to the inability to maintain financial literacy adequately, the tendency towards cash needs and short-term relief demand appears. Even though it is stated that banks continue their fund collection and utilization activities, it is observed that they operate in an order that supports the cash financial order in the essence of the business and in which the win-win model can be put in the background in the step of returning the money to its source, mostly under the target pressure and the desire to raise their financial statements higher each day.

Evaluation in terms of Participation Finance System

It is observed that the institutions operating in the participation finance system work in a customer-focused manner with the mission of mutual long-term gain and that they are in an effort to establish not only the present but also the future of the customers with a broad service understanding, and that they aim to put innovative products and services into use by developing their activities in line with this vision. 

The increase in social welfare is projected in a model in line with the increase in the share of the participation finance system in the national banking system. In this direction, with the establishment of new participation banks and the diversification of inclusive service, the sector's share that was around 4-5% until a few years ago has recently reached 7.3% in total assets, which is the clearest indicator in this regard. It is known that the aim is to bring this share to 25% in line with the medium and long-term plans of the Finance Office of the Presidency of Turkey.  

In summary:

We have started to see the positive results of the institutions operating in the participation finance system, both financially and with a large customer base, and that they can serve the whole of Turkey and we expect that this development will continue in a stable manner in the future.


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