Turkey continues to move ahead in its bid to assume a leading position in conventional and Islamic finance, according to a Turkish lecturer.
In order to fully develop Islamic finance, the country should shape financial instruments with a holistic approach under Islamic finance principles, said Hamdi Döndüren, the head of the Islamic Economics and Finance Department at Konya Karatay University.
The steps Ankara has taken towards becoming a leading actor in global Islamic finance are admirable, Döndüren told Anadolu Agency (AA).
Islamic finance should not be treated as simply Islamic banking, as the financial sector should also cover insurance, treasury operations and accounting as well as regulatory transactions, he said.
"Even banks are interest-free. We would not have done business in accordance with Islamic finance if you cannot perform all your financial transactions within the framework of Islamic finance instruments," Döndüren noted.
"For this, we need fintech applications used in financial circles, Islamic insurance companies, Islamic investment funds and Islamic sensitive capital market intermediary institutions."
He expressed optimism that academics in Turkey would want to focus on the Islamic finance field.
"The Islamic finance sector is a newly developing sector in the world and Turkey has carried out studies simultaneously with the world," he said.
With the participation of state lenders in this field, confidence in Turkey has been boosted related to Islamic finance, he said. "Our country will become one of the leading countries in this field both in sectoral and academic terms in the coming years."
Global demand
The Islamic finance industry, which dates to the 1960s, has achieved significant successes and is exhibiting a remarkable growth trend today, said Döndüren.
In this process, the work of governments, especially in Malaysia, Indonesia, Egypt, Iran and the Gulf countries, as well as international organizations such as the Organisation of Islamic Cooperation (OIC) and the Islamic Development Bank, have made significant contributions to the development of Islamic finance, he noted.
Particularly in the last 15-20 years, Turkey made serious progress in terms of institutional and legal regulations, he said.
Countries with advanced financial services, such as the U.K. and Luxembourg, have shown interest in Islamic finance for many years, according to Döndüren, adding that the U.S. also has a high level of interest in Islamic finance products, especially through large investment funds in capital markets.
Mentioning the first Karatay International Conference on Islamic Economics and Finance (KARCIEF), organized by his school in May with international participation, he said the chairpersons of various chambers of commerce, officials and academics addressed the seminar.
The two-day event discussed six topics, including Islamic finance, Islamic capital markets, financial technologies and SMEs.
The school also plans to hold the event annually, he noted.
Highlighting that the university accepted its first Islamic economy and finance students in 2016, he stressed that there are only two universities in Turkey active in the field.
He noted that students in Turkey have shown a fair amount of interest in the field, adding that the country's education institutions started teaching courses in Islamic economy and finance.
"Institutes, research centers and postgraduate programs were established in many universities. Also this year, for the first time, a state university obtained establishment permission for an undergraduate department of Islamic economy and finance," he said.
All of these aspects stand to make Turkey a leading country in this area, Döndüren noted.