Islamic Banking in Turkey, Indonesia and Pakistan: A Comparison with Malaysia

By Paul Wouters

Worldwide, the Islamic finance industry is developing rapidly. While it makes sense for the Islamic financial institutions to foster growth and to regularly compare themselves against the financial market as a whole, sometimes it is also worthwhile to keep an eye on developments in different countries.

It is easy to talk about "market shares" and "deposits", but what do these terms really mean? And what can be expected in the near future? For a better idea, we will examine the Islamic banking system in some countries: Turkey, Indonesia and Pakistan.

Turkey and Indonesia are secular republics where Muslims form the majority of the population, but Islamic finance developed differently in the two nations.

With a population that is roughly slightly over half that of both countries combined; the Islamic Republic of Pakistan is used as an outside comparator. To put all that into better perspective, the writer has included some data from Malaysia as benchmark..more