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Between consumer demand and Islamic law: The evolution of Islamic credit cards in Turkey

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  • Çokgezen, Murat
  • Kuran, Timur

Abstract

The elimination of interest from financial transactions has been a salient goal of Islamization movements around the world. Its proponents have had to balance this objective, which they claim to draw from Islamic law (Sharia), against consumer demand for convenient products. In general they have opted to accommodate consumer demand, but surreptitiously, using legal ruses to disguise their compromises. Turkey's experience with credit cards offers a revealing case of the obfuscation in question. Having denounced credit cards as un-Islamic, Turkey's Islamic banks have all proceeded to issue credit cards of their own in order to remain competitive with their openly interest-friendly, conventional rivals. With local variations, the Turkish pattern resembles that of other markets where Islamic credit cards have made inroads. In Malaysia and the United Arab Emirates, too, Islamic credit cards function like those of the conventional banks with which they compete for customers. The “Islamic” features of Islamic credit cards amount to branding. Contrary to the claims of their proponents, they do not involve fundamental financial innovations.

Suggested Citation

  • Çokgezen, Murat & Kuran, Timur, 2015. "Between consumer demand and Islamic law: The evolution of Islamic credit cards in Turkey," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 862-882.
    • Handle: RePEc:eee:jcecon:v:43:y:2015:i:4:p:862-882
    DOI: 10.1016/j.jce.2015.07.005
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    References listed on IDEAS

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    Citations

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    Cited by:

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    2. Saibal Ghosh, 2020. "Access to and use of finance in India: does religion matter?," Indian Economic Review, Springer, vol. 55(1), pages 67-92, June.
    3. Fulya Apaydin, 2018. "Regulating Islamic banks in authoritarian settings: Malaysia and the United Arab Emirates in comparative perspective," Regulation & Governance, John Wiley & Sons, vol. 12(4), pages 466-485, December.
    4. Aysan, Ahmet F. & Disli, Mustafa & Duygun, Meryem & Ozturk, Huseyin, 2018. "Religiosity versus rationality: Depositor behavior in Islamic and conventional banks," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 1-19.
    5. Alexakis, Christos & Kenourgios, Dimitris & Pappas, Vasileios & Petropoulou, Athina, 2021. "From dotcom to Covid-19: A convergence analysis of Islamic investments," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    6. Christophe Boone & Serden Özcan, 2020. "Oppositional Logics and the Antecedents of Hybridization: A Country-Level Study of the Diffusion of Islamic Banking Windows, 1975–2017," Organization Science, INFORMS, vol. 31(4), pages 990-1011, July.
    7. Christophe Boone & Serden Özcan & Jia Li, 2022. "How are Competing Logics Combined in Managerial Teams? The Impact of Branch Founding Team Hybridity on the Growth of Islamic Bank Branches in Turkey, 2002–19," Journal of Management Studies, Wiley Blackwell, vol. 59(6), pages 1460-1492, September.
    8. Cameron, Alistair & Oak, Mandar & Shan, Yaping, 2021. "Peer monitoring and Islamic microfinance," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 337-358.

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    More about this item

    Keywords

    Banking; Credit card; Islam; Interest; Turkey;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • K29 - Law and Economics - - Regulation and Business Law - - - Other

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