Assessment of participation finance compliance levels of healthcare companies listed on Borsa Istanbul

Aim: The primary objective of this study is to analyze the compliance levels of healthcare companies listed on Borsa Istanbul with participation finance principles and their use of debt instruments, thereby revealing the structural compatibility of the healthcare sector with the participation finance system and their utilization of interest-free financing instruments. Based on the assumption that there is a natural alignment between the ethical, social responsibility, and societal benefit-oriented structure of the healthcare sector and the principles of participation finance, the study aims to examine this relationship at the company level, grounded in financial data and Public Disclosure Platform notifications. Materials and Methods: This study adopts a qualitative research method, employing a case study design. The research utilizes document analysis as the data collection tool, and the dataset is based on the electronic data published on the Public Disclosure Platform during the periods of 2023/12, 2024/6, and 2024/12. The sample consists of healthcare companies listed on Borsa Istanbul, and their compliance levels with participation finance principles were evaluated based on the Participation Finance Principles Information Form (KAFİF). In addition, the companies' debt instrument notifications were analyzed to determine the extent to which they incorporated interest-free financing instruments into their borrowing practices. Results: It was determined that the level of compliance with participation finance principles varied among the companies. It was found that 20% of the 15 different healthcare companies had provisions in their articles of association that included privileges not in line with participation finance principles. Approximately 46% (7 companies) were found to be compliant with participation finance principles, while the remaining companies' interest-based income, assets, and debt ratios were found to hinder such compliance. Additionally, it was observed that approximately 33% (5 companies) of the companies in the study group had issued debt instruments. Conclusion: The findings indicate that the healthcare sector is structurally compatible with participation finance principles and that the important part of the examined companies could be suitable for participation finance investors. This situation may provide an advantage for healthcare companies by expanding and diversifying the investor profile through the issuance of equity-based and debt-based capital market instruments aligned with participation finance principles. However, it was also observed that the share of participation finance debt instruments among the total issuances of healthcare companies listed on Borsa Istanbul remains relatively low. Keywords: Participation Finance, Participation Finance Principles, Borsa Istanbul Healthcare Companies, Healthcare Sector