The Role of Islamic Finance in Empowering the Refugees and Immigrants in Turkey

Yılmaz İ., Akkaş E.

Conference on Financial Environment for Refugees and Immigrant Communities: Islamic Finance in Action, Dundee, England, 2 - 03 March 2023, pp.1-10

  • Publication Type: Conference Paper / Summary Text
  • City: Dundee
  • Country: England
  • Page Numbers: pp.1-10


A stunning movement of migration has been observed throughout the world in recent decades due to several factors, including political instability, economic disparities, and socio-cultural changes. Population movements due to forced migration became a major threat to be controlled by international political authorities in the wake of the Arab Spring and the Syrian war, as well as the recent Ukrainian war resulting in food and energy shortages in the face of the global pandemic. It is important to settle political stability and minimize the disparity in social welfare levels among different geographies to prevent such an uncontrolled movement. Despite this, political, financial, and humanitarian crises followed one after another during these times; hence, let alone stability, there was a great deal of uncertainty in imagining a post-pandemic world.


Based on a closer look at instabilities, most migrations took place from Muslim-populated regions to European countries. These people under the statutes of immigrants and refugees who escaped from their old habitats struggle to settle in a new form of living based on Islamic precepts. Those who live at the level of subsistence require basic needs such as sheltering and nutrition, while others above the subsistence level demand an arrangement of social space for adaptation to the host country. One of the essential issues at stake for immigrants and refugees is access to economic sources and the availability of legal infrastructure for their economic integration and financial inclusion. In specific, financing these communities is an urgent task to be addressed since emancipation and empowerment of refugees and immigrants is very much related to equality of opportunity in accessing to economic sources. It is evident that these people have limited access to reach financial services; thereby neither basic needs nor the entrepreneurial attempts have been satisfied sufficiently. On the supply side, when the diversity in Islamic contracts is considered, the situation to access sources gets even worse. The global Islamic financial industry increased its size all over the world with a great transactional development over the decades, but its agenda is not that much rich in terms of providing alternative financial instruments to diversified groups including immigrants.


Turkey has been home to the largest immigrant groups for more than ten years. UNHCR reported that Turkey hosted 3.6 million Syrian refugees and 320 thousand refugees from other nationalities by the end of October 2022. The number of immigrants from different nationalities, particularly Iraq, Iran, and Afghanistan, has increased in Turkey recently along with refugees. In this context, it has become important to understand the extent to which refugees and immigrants in Turkey contribute to Turkey's economy and financial access they have been given by the governmental authorities as well as Islamic NGOs and participation banks. In responding to this, over the past decade, an increasing number of research has been done to locate the degree of financial inclusion of immigrants and refugees in the sense of their contribution and integration. Yet, a comprehensive look at the issue from the perspective of emancipation an empowerment of these disadvantaged groups is required beyond financial inclusion. Thus, it is important to discuss social and economic difficulties these groups experience when initiating and surviving their businesses or enterprises vis a vis structural financial barriers they are encountering. As announced by Turkish Minister of Trade at the time in 2019, there were 15.159 companies that had at least one Syrian partner operating mostly in the cities of Istanbul, Gaziantep, Mersin, and Hatay. Additionally, despite coming from different nationalities, a large majority of these people are Muslims. From this angle, having a clearer understanding of Turkey's migration policies is quite important to identify what is taking place on the ground in terms of the utilization of Islamic forms of economic and financial resources by these communities. Especially, a growing prominence of Islamic finance and the active roles of Islamic NGOs towards immigrants in Turkey is a great chance to bring a novel attempt in modeling an authentic resolution to empowering them.


This study aims to extend the provisions of the Islamic finance industry in empowering refugees and immigrants by increasing their access to economic sources through profit and loss sharing and risk-sharing understanding. This enables the immigrant groups under temporary protection, asylum, and irregular migration to identify and resolve their challenges in accessing sources and enhancing their ability to participate in the financial system. In doing so, firstly, the present conditions in Turkey are portrayed by looking at the challenges in the accessibility of financial opportunities by refugees and immigrants. Specifically, the data about the number of business and entreprises operated by these people disclosed by the governmental bodies like Istanbul Chamber of Commerce and Istanbul Chamber of Industry and the interviews about projections for these initiatives are expected to reveal existing policies done over the years. In addition, the attempts on the side of Islamic NGOs and participations banks to provide financial service to these groups are explored through several ways including in-depth interviews. The overall objective in applying this method is to see both contributions from civil society and public authority to empowering refugees and immigrants. Thus, it is possible to state twofold immigrant policies that need to be implemented by civil groups and governmental bodies by initiating some policies in adapting these people to the prevailing economic atmosphere and leveraging their economic situation. The originality of this paper comes from the strive for providing an authentic approach to empowerment of immigrants and refugees through an ihsani governance model, which essentializes material, moral and spiritual development of each group in the society in a harmonious way.