Favoring the small and the plenty: Islamic banking for MSMEs

While MSMEs form the backbone of many countries, most them suffer from limited access to finance. We extend literature by examining whether Islamic banks, compared their conventional peers, favor more credit market segment in Turkey. do this considering various aspects lending behavior towards (total lending, foreign currency loan commitments, quality, and revenues) across different size categories (micro, small medium-sized firms). Our results show that once we control for bank-specific characteristics, find banks are engaged with MSME financing generate revenues servicing MSMEs. Concerning quality portfolio, no distinguishable patterns were observed between banks. • Lending characteristics each category examined relationship bank orientation. aggregate categories. is not