UK and Turkey push Islamic finance through fintech
The UK and Turkey have launched a joint initiative to try and scale Islamic finance through the fintech sector.
At the moment it’s in the early stages as the idea is set out in a new report from the UK-Turkey Islamic Finance working group. This offers a series of recommendations, practical case studies and insights.
The working group is supported by TheCityUK, an industry-led body representing UK-based financial services, and the stock exchange Borsa Istanbul.
The plan is to bring more Muslims and non-Muslims into the global financial system, “while staying true to their values”.
Wayne Evans, advisor, international strategy, TheCityUK, says this cooperation “will help to further the development of Islamic finance fintech solutions as well as deepen the trade and investment relationship between the two nations”.
Dr Recep Bildik, director at Borsa Istanbul, adds: “Participation finance helps reduce poverty, expand access to finance, develop the financial sector, and build stability and resilience with its interest-free, asset-based/backed, risk-sharing and sustainable features.”
The two entities cite World Bank figures, which show that 6% of the world’s population opt out of the financial system for religious reasons, with “significantly” higher percentages in Islamic countries. This figure could be up to 19% in Turkey, “despite the fact that it’s a secular democracy”.
In total, 43% of Turkish adults do not hold a bank account (for religious or other reasons), yet two thirds of the world’s unbanked population have access to a smartphone, creating the possibility for Sharia-complaint products to fill this gap.
According to the duo, the UK is the leading western centre for Islamic finance and after Malaysia, is the second largest market globally, home to 16 of the 103 fintech companies offering Islamic finance products in 2017.