We do not call them Islamic banks in Turkey. Banks are banks, administrative apparatuses. In the past, they were termed “Special Finance Institutions” and only after the 2005 amendments to the Banking Law are they now called "Participation Banks”. So far so good. As of 2012, however, the share of Participation Bank assets among total banking assets is around 5%, which is not that much. 92% of the assets belong to banks, as we know them across the World. According to the 2014 Global Financial Development Report (GFDR2014) of the World Bank, “Islamic assets” per person are around 500 dollars in Turkey. The same number is around 5000 dollars in Malaysia, 2000 in Indonesia, 150 in Egypt and less than 100 dollars in Tunisia. So one quick glance will tell you that Islamic banks are tiny in Turkey and also pretty small in the rest of the World.

Around half the population of the World does not have access to financial institutions, according to the GFDR2014. That is, only 55% percent of males and 47% of females have bank accounts. Access to banking is important to empower individuals. What are the reasons for not having access? Looking at the data, the “religious reasons” answer is definitely not the most prominent one. Firstly, about half of the world’s population does not have access to banks because they do not have enough savings to deposit at a bank. So poverty is the first reason. The second reason is that it is too costly to open an account. That is why households often rely on one account, which usually belongs to the male. So women only have only indirect access. Religious reasons only come in fourth. This relative insignificance of religion in banking might be the reason Islamic banks are so small. Only about 8% of Turkey’s population refrains from opening bank accounts due to religious reasons. 58% of Turks have one. In Malaysia and Indonesia, less than 1% doesn’t have accounts for religious reasons. So financial inclusion is first and foremost about having enough savings to open an account. The lack for banking in almost half the world’s population is not because it isn’t desirable, but rather that it isn’t attainable.

There is another reason however, that we would do well to reflect upon. In the World Bank Survey that covers 148 economies including West Bank and Gaza and around 150 thousand individuals, “lack of trust” as a third reason for not opening an account is twice as frequent as “religious reasons.” Lack of trust is directly related to institutional infrastructure and government interference in the market in our part of the world. Only Turkey and Israel were supposed to be different from the rest of the Middle East, since only we have a solid market economy base. Yet the lack of trust persists. Beware of the Ottomans, the old saying goes, Ottomans pull all sorts of tricks out of their hats. Read that as “beware of the government.” That mentality is ingrained in us, and it is why access to banking remains low in our part of the world. That is why, since 2002, the number of individual equity investors got stuck at around 1 million in Turkey, which is less than the number of Syrian refugees nowadays. So it all comes down to rule of law issues, if you ask me. I’m afraid the rather open political campaign against Bank Asya has only strengthened our ancient distrust of the Sublime Porte.

This commentary was published in Hürriyet Daily News on 20.09.2014