TÜRK EXIMBANK IS IMPLEMENTING THE PARTICIPATION-BASED EXPORT CREDIT INSURANCE PROGRAM

After the amendments made by the BRSA to the Banking Law on the implementation of interest-free banking transactions by development and investment banks, the creation of interest-free banking products was accelerated by Türk Eximbank. Accordingly, an interest-free banking Advisory Committee was established within the Bank in 2022. Turkish Eximbank, which Decouples interest-free banking activities from other banking activities in all business processes with the window system model, which has examples in the world, has added the “Participation-Based Export Credit Insurance” product to the export credit insurance programs it has been offering to exporters since 1989.

As a reflection of Türk Eximbank's developing vision and innovative approach, Participation-Based Export Credit Insurance, which is the first in the field of export credit insurance, will contribute to increasing our country's exports in a reliable environment by insuring exporters against commercial and political risks of export receivables with a maximum term of 360 days arising from sales of goods in accordance with the Principles and Standards of Interest-free Banking for buyers located abroad.

Türk Eximbank General Manager Ali Güney stated that they attach great importance to interest-free banking activities and said, ‘Compliance has been received from the Advisory Committee established within our Bank within the scope of the program that will work with the Hybrid Model (proxy / mudarebe). By separating the participation insurance accounting accounts of our Bank from the existing conventional insurance accounting accounts, it was ensured that the contribution premiums to be paid by the insured were transferred to a separate risk fund. Contribution premiums collected in this fund will be evaluated in interest-free banking investment instruments, and compensation claims for losses incurred by insured companies will be covered through this fund. Agreements have been made by our Bank to share the risks assumed by Participation-Based Export Credit Insurance with Turkish Participation Reinsurance and international retekaful companies," he explained.

Emphasizing that the Bank expands the scope of products and services every year, Güney said, "Within the scope of export credit programs, which are another important product of the bank, they provide to exporters by obtaining funds from international organizations according to interest-free banking principles, through the two-stage murabaha agreement with the Islamic Development Bank (IDB), syndicated financing from the Gulf and murabaha syndication Jul with the International Islamic Trade Finance Corporation (ITFC)."

by providing funds within the framework of interest-free banking, they provided murabaha financing in the amount of US $ 105 million in 2022, and this year they continue to use funds in the amount of US $ 327 million in total,” Jul said.

In addition to the funds obtained from international organizations, they also offer the Export Credit product Before Shipment, which they use through commercial banks from their own sources, to exporters who apply from participation banks by making it in accordance with the Principles and Standards of Interest-free Banking Jul., Ali Güney stated that Participation Banks also provide financing for the investments of exporting companies to be made through financial leasing with the Financing Program for Leasing Transactions. “As Türk Eximbank, we aim to reach all our exporters by diversifying our financing and insurance products in the field of interest-free Banking.' he made his assessment.