Due to the fact that interest is forbidden in Islam, interest-free financing is the method of financing used along with Islamic regulations different than the conventional banking transactions. The system, which accepts the sharing of labour and risk according to the distribution of profit and loss, is rather known as interest-free financing.
Published in Chapter:
A New Financing Model in Banking Sector: Recommendations for Sukuk and Its Development in Turkey
Hasan Dinçer (Istanbul Medipol University, Turkey), Ümit Hacıoğlu (Istanbul Medipol University, Turkey), and Banu Kiskac (Beykent University, Turkey)
Copyright: © 2015
|Pages: 15
DOI: 10.4018/978-1-4666-7288-8.ch014
Abstract
It's a reality that the world economy is rapidly growing and developing. International foreign markets are in trouble about offsetting the funds that meet the finance demand with every passing day. In this case, the need of finding new sources is triggered off. In Islamic countries, in which interest is forbidden, bringing the idle funds to the economy is to be seen to offset these needs partially. Thanks to this, the investors, who reject to invest in financial markets due to their faith, have an alternative. In this chapter, Sukuk, the development in Islamic finance markets, an item of borrowing out of assets, is observed. In this regard, this study explains the structures, types and the actions of the sukuk hence one can conclude that Sukuk can be valued as an alternative investment item for Turkish markets.