Journal of Insurance and Financial Management, Vol. 4, Issue 1 (2018) 78-97 *Corresponding Author: ali.coskun@aum.edu.kw Author(s) retain copyright of the submitted paper (Please view the Copyright Notice of JIFM). This work is licensed under a Creative Commons Attribution 4.0 International License. Journal of Insurance and Financial Management (ISSN-Canada: 2371-2112) An Efficiency Analysis of Interest-Free Banks: An International Comparison Ali Coskun a,* , Esra Balci b a Professor of Accounting, American University of the Middle East, Kuwait b Istanbul University, Turkey ABSTRACT The aim of this study is to analyze the comparative efficiency of interest-free banks worldwide. This study also investigates the reasons for inefficiency and provide suggestions for inefficient banks to improve their efficiency. The study measures and analyzes the pure technical efficiency (PTE), scales efficiency (SE) and overall technical efficiency (OTE) scores of 86 interest-free banks from 24 different countries between 2010 and 2013. Data envelopment analysis (DEA), which is a non- parametric method, was used. The results indicate that the average for four years of overall technical efficiency (OTE) in the selected interest-free banks was about 45.8%. Their pure technical (PTE) and scales efficiencies (SE) are higher than OTE and stand at 64.4% and 71.1%, respectively. The results of the analysis also suggest potential improvements for the input and output of the banks. This paper compares the efficiency of a sample of interest-free banks in 24 countries in very recent years and identifies the most and least efficient banks. It also includes benchmarks for interest-free banks and offers suggestions for improvement. Journal of Insurance and Financial Management ARTICLE INFO Article History Submitted 27 Mar 2018 Accepted 29 Oct 2018 Available online 23 Nov 2018 JEL Classification C67 G21 Keywords Interest-Free Banking Banking Efficiency Data Envelopment Analysis (DEA) Islamic Finance Comparative Efficiency