Cooperation Of Türk Eximbank And Participation Banks In The Financing Of Foreign Trade

The practices implemented, new products put into effect and products that are still being worked on are an indication that our cooperation with participation banks in the financing of exports will increasingly continue.

MAGAZINE 22.09.2021, 13:20 23.09.2021, 16:50
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Cooperation Of Türk Eximbank And Participation Banks In The Financing Of Foreign Trade

As a country with a young, dynamic and educated workforce and high economic potential, Turkey has been expanding its foreign trade volume over the years. The increase in foreign trade transactions, where there is intense competition, depends on many variables such as economic stability, efficiency and productivity, quality, commercial infrastructure, and correct financial planning. Access to appropriate financial resources and correct financial planning are critical factors that will accelerate foreign trade. In this context, Turk Eximbank, the official export support organization of Turkey, aims to provide exporters with access to suitable support with credit, guarantee  and insurance products, and accordingly, to improve exports and increase the competitiveness of exporters. Participation finance products have been initiated for development through our Bank to expand the existing customer portfolio by making it popular and increase support for exports by reaching out to exporters with participation finance sensitivity. Collaboration with the financial ecosystem is critical in the realization of our Bank's goals and strategies.

Collaboration with the financial ecosystem is critical in the realization of our Bank's goals and strategies

Participation banks have been expanding their market share in the financial system and, in addition to increasing their share in export credits due to the recent growth rate, which exceeds the industry average. This indicates that the interest of participation banks in the field of export financing has increased. In this context, a working group was formed by contacting the Participation Banks Association of Turkey (TKBB) to increase the cooperation between our bank and participation banks and develop products suitable for customers with participation finance sensitivity.

During the above-mentioned meetings, firstly, information was provided on our Bank's current products and services. Then, further active usability of these products in the participation  finance system was evaluated. Furthermore, detailed studies were carried out to develop new participation finance products. As it is known, primarily the Participation Finance Investment Loan product, which works with the principles and policies of participation finance, was developed. Participation Finance Investment Loan is a program that has been put into operation to finance the capital goods expenditures of exporting and foreign exchange earning service companies through the Murabaha method, one of the participation finance model applications. Within the scope of this program, 45 million dollars were allocated. Subsequently, in parallel with the demands raised in the working group meetings, a separate area for participation banking products was created on the official website of our Bank so that customers with participation finance sensitivities could easily access information about our Bank's products and services.

Thanks to the studies carried out, longer-term windows were opened in the Participation Bank Pre-Shipment Export Credit program, which enables exporters and companies operating in foreign currency earning services to benefit from the resources of our Bank through participation banks. Furthermore, exporters have access to long-term financing that will provide a competitive advantage in international markets.

In addition to these, studies on the export insurance (Takaful) program in accordance with participation finance principles has also been initiated. As a result of the meetings carried out within the body of the working group formed in coordination with the TKBB, the practices implemented, new products put into effect and products that are still being worked on are an indication that our cooperation with participation banks in the financing of exports will increasingly continue.

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