Turkey is going through a productive period with its brands that can compete with global brands. One of the most significant advantages of developed countries, the export model exerted by producing added-value with the import of raw materials and resources, has become our country's foreign trade strategy in recent years. As a result of the recovery that has started in the second quarter of the year, there is a strong demand on the export and import side. We broke a record by increasing our 12-month total exports to over $200 billion as of July.
The participation finance system, which is based on trade and production, also contributes to the development of our country by mediating foreign trade transactions. Participation banks can offer many products and services in the field of foreign trade financing to their customers at highly advantageous conditions. We, as Türkiye Finans, fund the needs of foreign trade companies with non-cash products such as letters of credit and foreign guarantees that secure foreign trade, as well as our products such as Export Support Financing, Flexible Support Financing, Leasing and Support Checks, and support their healthy growth.
We know that Turkey can export at least 500 billion dollars with its producers, entrepreneurs and financial institutions. With the realization of the postponed demands, we continue our work to respond quickly to the needs of our exporter customers. Although letter of credit transactions constitute a small part of the total foreign trade volume, they provide important information about the general situation of the market as the products with the highest value added. According to the BDDK records, the risks of letters of credit in the banking sector increased by 77% in July 2021 compared to the previous year. Participation banks, on the other hand, are positively differentiated from the sector, and this increase is around 90%. This enables participation banks to increase their market share of letter of credit risk in the same period from 6 % to 7%, with a gain of 1 point in just one year. One of the most significant indicators of the importance that Türkiye Finans attaches to foreign trade is that we reached the volume of transactions with a letter of credit we realized in 2020 in the first six months of 2021. Our goal is to increase our foreign trade market share to 2% by making this increase permanent.
Murat Akşam
CEO of Türkiye Finans
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