FACTORS LIMITING THE MARKET SHARE IN PARTICIPATION BANKING: A QUALITATIVE ANALYSIS OF NON-PREFERRING CUSTOMERS

Despite having a history of approximately 41 years in the Turkish banking system, participation banks hold a market share of only 9.24% as of January 2026, falling short of their potential despite the country's predominantly Muslim population. While existing literature extensively examines the reasons for choosing participation banking, there is a notable scarcity of research focusing on the reasons for non-preference. This study aims to identify the underlying factors that lead individual and commercial customers to refrain from using participation banking services. Within the scope of the research, semi-structured interviews were conducted with 10 participants who do not prefer participation banks, and the data were evaluated through frequency analysis. The findings indicate that although participants associate participation banking with "interest-free finance," they perceive no structural difference between these institutions and conventional banks. Furthermore, significant gaps in knowledge regarding operational reliability, existing banking habits, and a general lack of institutional recognition were identified as primary barriers to preference. The results suggest that to increase their market share, participation banks must focus on transparent communication and strategic initiatives that clearly demonstrate their differentiation from conventional banking.