Confidence boost for Turkish SFHs (Editorial)

The Turkish Islamic finance sector has recovered from the Turkish banking collapse of 1999 and the fall of the Ihlas Financial house in 2000, as witnessed by the 25% growth during the first nine months of 2003. The Turkish Islamic finance sector is poised to develop into a major market similar to that of Malaysia, and aims to attract global investment. Under Turkish law conventional and Islamic (interest free) banks are equal and covered by the same legal framework. Turkey issued a Deposit Guarantee Fund (DGF) that is the first deposit insurance program consistent with Islamic financial guidelines. Turkish Islamic banks (referred to as special finance houses, or SFHs) offer competitive rates of return, have witnessed increased deposits in recent years, have opened up more dialogue with conventional banks, and have increased the level of retail financing available.