Interest-free Financing: An Overview of Interest-free Finance in Turkey and Bangladesh

Abstract

The research paper aims to analyses the overview of interest-free finance activities in Turkey and Bangladesh. The history of the intellectual efforts of the Islamic economy in modern times is date back to the 1950s. The interest-free finance system emerged with the claim of being an alternative to the aim of eliminating the complexity of the irregular order in the modern financial system. Emerging Bangladesh and developing turkey were started up their interest-free financing from the decade of 1980. Bangladesh started interest-free financing from 1983 by establishing Islamic bank limited regarded as the pioneer of Islamic banking in Bangladesh. Participation banks of turkey have been growing continuously since the year they started operations in 1985. Islamic banks Limited and Participation bank of turkey hold market share 24% and 5.3 % in their banking sector, respectively. Interest-free financing as a development factor within the framework of the implementation of multilateral projects that contributes to both country’s economy. This research paper considers qualitative and analytical research based on the secondary data collection process. Improving the regulation of financial organizations in interest-free financing that keep contributing to the development of infrastructure of Islamic finance activities for both Turkey and Bangladesh.