Participation banks’ contribution to the economy: The case of Turkey

Participation Banking growing with a rising trend in the world, has become a major role in financial market. Participation banks aim to survive with the least damage by marketing derivative products rather than taking actions sometimes 10, sometimes 30 times the pecuniary resources by the financial values they have. With a mode of operation, the participation banking differing from deposit banks has the feature to fill the gaps that deposit can not. Participation banks have an undeniable role in rotating the funds into the economy which has been inactive due to the current account deficit being expected to economy as employment and production.

The aim of the study is demonstrate the volume of participation banking in Turkey and its contribution to the economy of the country. In the study, the structure of the funds which the attendant banks collected and used between the years of 2005- 2013 has been compared with the banking system. As a result of the study, it is revealed that the operating volume of participation banks have increased and it plays a positive role in striving with employment, growth, unrecorded economy in Turkey.