In a world grappling with economic volatility and uncertainty, lingering inflation and the rising cost of capital, an alternative financial system grounded in ethics and risk-sharing is attracting renewed attention. Islamic finance – a system that prohibits interest, discourages speculation and demands real asset backing – is seeing a global resurgence. Two countries, Türkiye and the U.K., believe they’re ideally placed to lead the charge, according to a report released on Wednesday.
As per an Anadolu report, Treasury and Finance Minister Mehmet Şimşek recently described Islamic finance as “structurally better equipped to address uncertainty and ambiguity,” noting that its core principles make it more stable in times of global financial stress.
“Islamic finance tends to be, relative to its conventional peers, more resilient,” Şimşek said. “It provides you with more stability and liquidity as a part of risk sharing. This is the essence in terms of your profit and loss arrangements.”
Şimşek was part of a high-level Turkish delegation visiting London last week to attend the U.K.-Türkiye Islamic Finance Forum. The forum was hosted by the U.K. Department for Business and Trade in cooperation with the Participation Banks Association of Türkiye (TKBB).
On this occasion, TKBB and the U.K. Export Finance (UKEF) signed a Memorandum of Understanding (MoU) aimed at strengthening cooperation in Islamic finance.
Mehmet Ali Akben, chairperson of TKBB and general manager of Vakif Katılım Bank, reportedly highlighted the potential benefits of the deal for both countries.
“The share of participation finance in Türkiye’s banking sector is currently around 8%. Our initial goal is to increase this to 15%,” he reportedly said last week.
Akben noted that London remains a major global financial hub and pointed out that Türkiye has developed its own financial centre in Istanbul.
