IDEAS home Printed from https://ideas.repec.org/a/uii/jrisfe/v4y2025i2p166-176id41177.html

Green finance from the perspective of Islamic social finance: A case study of microfinance practices in Istanbul

Author

Listed:
  • Testru Hendra

  • Seppi Mustion

  • Karimaturrizky Syukri Nasution

  • Rana Nurulita Handra

Abstract

Purpose – This study aims to explore and analyze the integration of green finance principles with Islamic microfinance practices in Istanbul, Turkey. Specifically, it examines how Islamic microfinance institutions incorporate environmental and social sustainability values into their operational activities and investigates the role of Islamic social finance instruments, such as zakat, infak, sedekah, waqf, and qard al-hasan, in supporting the achievement of the Sustainable Development Goals (SDGs).Methodology – Employing a qualitative research design with a case study approach, data were collected through in-depth interviews, participatory observations, and document analysis involving key stakeholders of Islamic microfinance institutions in Istanbul. The data were analyzed using thematic analysis to uncover recurring patterns and themes related to the adoption of green finance principles. The key variables examined included environmental sustainability, social sustainability, Sharia compliance, and the effectiveness of Islamic social finance tools.Findings – Findings indicate a positive but partial integration of green finance principles into Islamic microfinance practices, with notable contributions from zakat and waqf in promoting social welfare and environmental responsibility. However, challenges such as regulatory constraints, limited awareness, and difficulties in measuring impact have also been identified.Implications – These implications underscore the need for enhanced regulatory support, capacity building, and awareness programs to foster a more robust and sustainable Islamic microfinance sector.Originality – This study contributes both conceptually and practically to the literature on sustainable Islamic finance and provides strategic recommendations for policymakers, practitioners, and researchers. This study is expected to support the advancement of inclusive, ethical, and environmentally responsible microfinance models aligned with Sharia principles and global sustainability agendas.

Suggested Citation

  • Testru Hendra & Seppi Mustion & Karimaturrizky Syukri Nasution & Rana Nurulita Handra, 2025. "Green finance from the perspective of Islamic social finance: A case study of microfinance practices in Istanbul," Review of Islamic Social Finance and Entrepreneurship, Center for Islamic Economics and Development Studies [P3EI], vol. 4(2), pages 166-176.
    • Handle: RePEc:uii:jrisfe:v:4:y:2025:i:2:p:166-176:id:41177
    as

    Download full text from publisher

    File URL: https://journal.uii.ac.id/RISFE/article/view/41177
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lee, Chien-Chiang & Wang, Fuhao & Chang, Yu-Fang, 2023. "Does green finance promote renewable energy? Evidence from China," Resources Policy, Elsevier, vol. 82(C).
    2. Sinha, Avik & Ghosh, Vinit & Hussain, Nazim & Nguyen, Duc Khuong & Das, Narasingha, 2023. "Green financing of renewable energy generation: Capturing the role of exogenous moderation for ensuring sustainable development," Energy Economics, Elsevier, vol. 126(C).
    3. Wang, Kai-Hua & Zhao, Yan-Xin & Jiang, Cui-Feng & Li, Zheng-Zheng, 2022. "Does green finance inspire sustainable development? Evidence from a global perspective," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 412-426.
    4. George, Ammu & Huang, Jingong & Xie, Taojun, 2022. "Assessing the dual mandates of sustainability-linked monetary policy," Energy Economics, Elsevier, vol. 113(C).
    5. David Gilchrist & Jing Yu & Rui Zhong, 2021. "The Limits of Green Finance: A Survey of Literature in the Context of Green Bonds and Green Loans," Sustainability, MDPI, vol. 13(2), pages 1-12, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Dan & Zhu, Yanjin & Yang, Yuhan, 2024. "How Green finance affects export production quality: Fresh evidence from China," Energy Economics, Elsevier, vol. 131(C).
    2. Xu, Jin & Liu, Chengjun & Dou, Gang & Cai, Yunfei, 2024. "Mineral resource management in Chinese rural areas: Policy assessment for green economic growth," Resources Policy, Elsevier, vol. 90(C).
    3. Puspanjali Behera & Litu Sethi & Najia Saqib & Narayan Sethi, 2026. "Green Finance and Public–Private Partnerships: Dynamic ARDL Insights into Renewable Energy and Air Quality Enhancement," Economic Change and Restructuring, Springer, vol. 59(1), pages 1-25, February.
    4. Zeng, Ming & Zhang, Weike, 2024. "Green finance: The catalyst for artificial intelligence and energy efficiency in Chinese urban sustainable development," Energy Economics, Elsevier, vol. 139(C).
    5. Lee, Chien-Chiang & Yuan, Zihao & Kang, Yongchao, 2024. "Green finance and land ecological security: A potential mechanism for sustainable development," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1222-1241.
    6. Muhammad, Sulaman & Hoffmann, Christin, 2024. "From investment to impact: The role of green finance and technological innovation on German energy transition," Renewable Energy, Elsevier, vol. 237(PB).
    7. repec:rjr:romjef:v::y:2025:i:4:p:56-85 is not listed on IDEAS
    8. Zhou, Fangkezi & Pan, Yinghao & Wu, Jie & Xu, Chengzhen & Li, Xingchen, 2024. "The impact of green finance on renewable energy development efficiency in the context of energy security: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 803-816.
    9. Mário Nuno Mata & Rui Miguel Dantas & João Miguel Rita, 2026. "Mapping the Knowledge Landscape of Sustainable Finance in the Face of Climate Challenges: a Bibliometric Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(2), pages 4140-4174, April.
    10. Kartal, Mustafa Tevfik & Magazzino, Cosimo & Taşkın, Dilvin & Depren, Özer & Ayhan, Fatih, 2025. "Efficiency of green bond, clean energy, oil price, and geopolitical risk on sectoral decarbonization: Evidence from the globe by daily data and marginal effect analysis," Applied Energy, Elsevier, vol. 392(C).
    11. Liu, Xiaorui & Guo, Wen, 2025. "Dynamic impact of green finance on renewable energy development: Based on scale, structure, and efficiency perspectives," Renewable Energy, Elsevier, vol. 238(C).
    12. Lu, Peng & Wang, Ziwei & Liu, Yibo, 2025. "Green finance and micro-zone level carbon emissions," Finance Research Letters, Elsevier, vol. 79(C).
    13. Jianmu Ye & Efifania Dela, 2023. "The Effect of Green Investment and Green Financing on Sustainable Business Performance of Foreign Chemical Industries Operating in Indonesia: The Mediating Role of Corporate Social Responsibility," Sustainability, MDPI, vol. 15(14), pages 1-28, July.
    14. Zhang, Zhitao & Khan, Arshad Ahmad & Wang, Zonglin, 2025. "How does science and technology finance affect the renewable energy development? Evidence from China," Renewable Energy, Elsevier, vol. 243(C).
    15. Yuefeng Han & Feng Zhao & Boyu Zhao, 2024. "RETRACTED ARTICLE: Navigating a sustainable transition: green digital finance in manufacturing," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-16, February.
    16. Kazak, Hasan & Rahman, Mohammad Mafizur & Akcan, Ahmet Tayfur & Cetintas, Halit Buluthan & Kocyigit, Nezahat & Kilic, Cuneyt, 2025. "Performance of green finance: An evaluation of the OIC countries in the scope of 2030 Sustainable Development Goals," Energy Policy, Elsevier, vol. 207(C).
    17. Mayank Joshipura & Nohade Nasrallah & Nikita Kedia, 2025. "Green and Climate Finance for Sustainability: Hybrid Review and Framework Development," Business Strategy and the Environment, Wiley Blackwell, vol. 34(3), pages 3618-3634, March.
    18. Miklesh Yadav & Nandita Mishra & Shruti Ashok, 2023. "Dynamic connectedness of green bond with financial markets of European countries under OECD economies," Economic Change and Restructuring, Springer, vol. 56(1), pages 609-631, February.
    19. Tingting Song & Hongyue Li & Ziyang Feng, 2024. "Policy and market mechanisms for promoting sustainable energy transition: role of government and private sector," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-30, August.
    20. Satar Bakhsh & Md Shabbir Alam & Wei Zhang, 2024. "Green finance and Sustainable Development Goals: is there a role for geopolitical uncertainty?," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-30, August.
    21. Ballester, Laura & González-Urteaga, Ana & Shen, Long, 2024. "Green bond issuance and credit risk: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 94(C).

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uii:jrisfe:v:4:y:2025:i:2:p:166-176:id:41177. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Deni Eko Saputro (email available below). General contact details of provider: https://journal.uii.ac.id/RISFE/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.