Relationship with the Financial System and Empirical Analysis of Interest Ban Sensitivity

Leyla İşbilen () and Muhammet Sait Bozik ()
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Leyla İşbilen: İstanbul University
Muhammet Sait Bozik: Haliç University

Chapter 3 in The Demand for Alternative Finance, 2025, pp 43-66 from Springer

Abstract: Abstract This chapter explores the interplay between theological principles and consumer behavior in interest-free finance, focusing on Türkiye’s Savings Finance model. Grounded in Islamic theology’s prohibition of interest (riba), this study examines how moral norms and rational economic motives shape demand for alternative financial products. Using empirical data from seven Turkish regions, Chi-square tests and statistical analyses reveal that nearly half of respondents prioritize interest ban compliance, yet cost-effectiveness dominates long-term borrowing decisions (e.g., housing/vehicle loans). Demographic factors—gender, age, education, and income—significantly influence sensitivity to interest prohibitions, with younger, higher income, and educated groups favoring affordability despite theological considerations. The findings underscore the challenge of balancing moral norms with market competitiveness in Islamic finance. This analysis contributes to understanding consumer preferences in interest-free systems, offering insights for sector development and policy alignment with socio-theological values.

Keywords: Alternative Finance; Interest-Free Finance; Consumer Preferences; Rational Choice Theory; Participation Banking; Savings Finance; Moral Norms (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-01765-9_3

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DOI: 10.1007/978-3-032-01765-9_3

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