Turk Eximbank’s Targets and Activities in 2021
In the period ahead, Turk Eximbank targets to implement a support model allowing increasing competitiveness in exports with a solution-oriented perspective under the guidance of the analyses conducted and strategies devised.
Growing the Contribution to Exports through Strategic Transformation
Plans and strategies for 2021 and thereafter were formulated under the strategic transformation project initiated during 2020. Through data analyses, it is targeted to make use of export financing support more effectively on the basis of countries and sectors alike, without narrowing down their scopes.
Providing Financing Support to More Exporters, and in particular, to the SMEs
Plans and strategies for 2021 and thereafter were formulated under the strategic transformation project initiated during 2020.
strategic transformation project
Exporter SME companies that are critical with respect to our country’s commercial activities present priority also for Turk Eximbank. 2021 is planned to be a period when access is given to a higher number of exporters led by SMEs, support extended to the SMEs is augmented, and fast solutions aligned with exporters’ demands are provided.
Ensuring Continuity in Financing Facilities Offered to Exporters
In order to preserve and increase Turkish exporters’ competitive strength in products necessitating short-term financing, the Bank will continue to extend short-term export credit and short-term export credit insurance service for fulfilling operating capital needs at the preparation phase for exportation. Weight will also be placed on medium- and long-term credits and export credit insurance and guarantee operations in keeping with the general mission of export finance agencies of developed countries.
In an effort to sharpen exporter’s global competitive edge, the Bank’s credit programs will continue to be used to support the exportation, production and marketing processes of branded products that are based in innovation and R&D, offer high added-value, and are of the quality to strengthen and establish the “Made in Turkey” image, as well as of products with medium and advanced technology.
Financial support will be ongoing for FC-earning services such as tourism, logistics, consultancy, software, information and communication technologies, ship overhaul and repair. In addition, the Bank will also provide medium- and long-term financing for the operating capital and investment needs of companies engaged in FC-earning services and activities.
For medium- and long-term loans, Turk Eximbank obtains medium- and long-term funds mostly from supranational financial institutions and by bond issues. While efforts are being spent to increase the funds secured from supranational institutions for medium- and long-term loans, funds to be provided from international institutions such as the Council of Europe Development Bank (CEB), International Bank for Reconstruction and Development (IBRD), and Islamic Development Bank will continue to be used for financing our medium- and long-term loans in the period ahead, giving the priority to supporting export-oriented investments in their disbursement.
Diversifying the Types of Collaterals
Collateralization, which is one of the major difficulties for exporters in their access to credits, is a topic on Turk Eximbank’s agenda. In 2020, the Bank introduced the Credit Program Based on the Insured Credit Receivables in addition to collateral types put into implementation in previous years. In 2021, it is planned to increase awareness regarding collaterals acceptable to Turk Eximbank besides letters of bank guarantee, and to let exporters benefit from the Bank’s credit programs against different collateral instruments of a financial nature.
Developing New Programs
The competition that gradually gets fiercer in international markets constantly increases the importance of guarantee and insurance programs. Accordingly, weight will be given to mechanisms that will provide the exporters, which get the chance to work in an environment free from commercial and political risks thanks to insurance programs, with the opportunity to obtain financing more easily from commercial banks and other financial institutions. Accordingly, meetings were organized with The Banks Association of Turkey, Participation Banks Association of Turkey, and Association of Financial Institutions, and working groups were formed.
2021 is planned to be a period when access is given to a higher number of exporters led by SMEs, support extended to the SMEs is augmented, and fast solutions aligned with exporters’ demands are provided.
supporting SMEs
2021 plans include the following;
- Launch the Letter of Credit Confirmation Insurance Program to insure the risk of the foreign issuer bank’s non-payment of export letters of credit which are confirmed by a domestic bank,
- Transfer the funds of banks and financial institutions offering interest-free banking products to the financing of insured exports, and
- Develop the Political Insurance Risk Program for Overseas Contractors’ Services.
In addition, momentum will be given to promotion and marketing activities for the Letter of Guarantee Program, Credit Program Based on the Insured Export Receivables and Participation Finance Investment Credit Program that were enforced during 2020, from which lending started, and the credit programs will be extended.
Cooperation with other export credit agencies, regional and multinational finance institutions will be expanded, and support will be extended to Turkish companies’ transactions to be performed abroad within the frame of co-financing, insurance, reinsurance and co-insurance agreements to be executed.
Within the frame of credits provided to projects undertaken in foreign countries, cooperation will be sustained with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and other insurance agencies for obtaining cover against non-repayment risk by borrowing countries.
The Bank will continue to provide “Letters of Intent” in favor of firms planning to engage in new undertakings abroad or targeting to participate in international tenders provided that the related project is compatible with the Bank’s fundamental financing principles.
In an attempt to help exporters get increased share in strategic markets, medium- and long-term financing support at OECD’s Commercial Interest Reference Rate (CIRR) will continue for the financing of investment goods exports.
Activities for digital transformation will be ongoing at the Bank also in 2021.
