Participation banking and sustainable finance in Turkey: The case of Kuveyt Türk Participation

This thesis aims to evaluate Participation Banking from the perspective of sustainable finance models. The study is a qualitative research based on the review of secondary written sources such as relevant academic publications, sector reports, and current news analyses. Participation banking, with its fundamental characteristics such as interest-free principles, risk sharing, and orientation towards the real economy, can potentially contribute to achieving sustainable development goals. Nevertheless, it encounters various challenges such as capital inadequacy, funding costs, limitations in distribution channels, and product variety. Sustainable finance, on the other hand, by integrating environmental, social, and governance (ESG) factors into financial processes, aims to support the development of a more equitable, inclusive, and sustainable economic system. The literature review indicates that there are strong conceptual links between the two fields, but that there are challenges in translating this potential into practice. The case study of Kuveyt Türk Participation Bank analyzes the concrete reflections of this intersection in Turkey. The findings indicate that the integration of Participation Banking and Sustainable Finance holds significant potential to play a significant role in the sustainable transformation of the financial sector