THE ROLE OF TURK EXIMBANK IN NEW TRADE DYNAMICS AND STRATEGIC SOLUTIONS

How does Türkiye achieve sustainable growth in exports while global trade dynamics are changing rapidly? Ali Güney, General Manager of Türk Eximbank, made important evaluations of new market strategies, financing solutions, and supply chain transformation

Changing trade balances after the pandemic, increasing geopolitical risks, and fluctuations in the global economy bring both risks and new opportunities for exporters. Türkiye is trying to quickly adapt to this transformation with its strong production infrastructure and wide market diversity. So, how is the current export performance evaluated? What challenges do companies face in expanding into new markets and what role does Türk Eximbank play in this process? We discussed important topics regarding the future of exports with Ali Güney, General Manager of Türk Eximbank.

DEVELOPMENTS IN GLOBAL TRADE AND SUPPLY CHAIN TRANSFORMATIONS HAVE A SIGNIFICANT IMPACT ON GLOBAL EXPORT DYNAMICS. HOW DO YOU ASSESS TÜRKİYE’S CURRENT EXPORT PERFORMANCE AND ITS CAPACITY TO ADAPT TO THESE CHANGING CONDITIONS?

One of the biggest problems that emerged with the pandemic was that the supply chain operating in a way dependent on a single country/region created vulnerabilities for national economies. Recently, increasing geopolitical problems have caused problems in global trade, while we see an increasing tendency to create local comprehensive supply chains as a result of the increase in protectionism in trade policies. In addition, technological advances such as robotization, automation, and artificial intelligence have a cost-cutting effect on the value chain.

For these reasons, it is imperative to transform the supply chain for a more efficient and resilient supply chain system. In addition, the high tariffs imposed by the US administration after the elections have further increased protectionist tendencies in global trade. These developments increase uncertainties and put downward pressure on global trade growth. Türkiye’s exports increased by 2.4% in 2024 to a historic high of $261.9 billion, despite the weak economic performance in the EU, our largest market, and the ongoing wars and geopolitical problems in our near geography.

Among the main export items, motor vehicles, mechanical devices, mineral fuels, electronic products, iron and steel, and textile-garment products stand out. Türkiye is among the world’s leading countries in terms of both product and market diversity. In this way, it can limit the negative effects on exports in times of global crisis, recover quickly, and increase its resilience to sector or market shocks.

Türkiye’s export performance is strong thanks to its high product and market diversity. However, Türkiye needs to capitalize on its product and market diversity advantage with the right strategies to boost growth in total exports and the contribution of exports to growth under production capacity constraints. Export strategies are based on increasing the share of high-value-added products, digitalization, innovative product development, and orientation toward alternative markets. In this way, Türkiye aims to increase its export performance sustainably by adapting faster to changing global trade conditions and supply chain transformations. As Türk Eximbank, we continue to support our exporters within the scope of these strategies.

WHAT ARE THE BIGGEST CHALLENGES TURKISH EXPORTERS FACE WHEN EXPANDING INTO NEW MARKETS? HOW CAN FINANCING AND INSURANCE SOLUTIONS CONTRIBUTE TO OVERCOMING THESE CHALLENGES?

As Türk Eximbank, one of our most important missions is to facilitate and support Turkish exporters’ entry into new markets. We offer a wide range of cash and non-cash products that can be utilized from the very beginning of the production process in order to encourage Turkish exporters to enter new markets and help them build a more competitive, productive, and profitable export portfolio. In the process of expanding into new markets and adding new buyers from different countries to their portfolio, it is critical for Turkish exporters to be able to offer competitive prices in line with the dynamics of the relevant markets and to minimize the possibility of collection problems with buyers. For this reason, we provide support for our exporters to increase their competitiveness and minimize their risks with the financing and insurance products offered by our Bank.

With the cash credit support we provide, we endeavor to provide exporters with both TL and foreign currency borrowing opportunities at favorable costs and maturities, and thus support our exporters in opening up to new markets at competitive prices. We can easily say that Türk Eximbank’s Overseas Receivables Insurance is the strongest product we offer to support our exporters in opening new markets and increasing their export volume with new buyers.

With this product, our exporters not only have the opportunity to make a professional pre-assessment of the buyers with whom they will enter into commercial relations for the first time in new markets, but also have information about the repayment performance of the relevant buyer and, with the guarantee of Türk Eximbank, they can eliminate collection problems that may arise for both commercial and political reasons. This significantly increases the motivation of our exporters to include new buyers from new markets in their portfolios.

In addition, at the end of 2023, our Bank became a shareholder of Africa Finance Corporation (AFC), a multilateral organization representing Türkiye in Africa. Thus, a new strategic step was taken to strengthen the presence of our companies in the African market in order to increase Turkish exports of goods and services. We quickly started working on risk-sharing and alternative financing models that will reveal potential cooperation opportunities and pave the way for providing financial support to projects in Africa. I hope that in the coming period, we will carry out works that will make significant contributions to our country’s exports and our presence on the continent.

AS TÜRK EXIMBANK, WHAT ARE YOUR PRIORITY STRATEGIES FOR EXPORT FINANCING FOR 2025? ARE THERE ANY SPECIAL PROGRAMS TO ENCOURAGE SMES TO EXPORT?

In 2025, we expect TL loan interest rates to fall in parallel with the expected policy rate cut. In order to support the export sector, which is one of the areas most affected by this decline, we will offer CBRT Rediscount Credits with priority to SME exporters. Within the framework of our daily lending limits, we will make this resource, which is the most cost-effective pre-shipment working capital loan for our exporters, available. In addition, we will continue to extend our Bank’s TL credit products, which until 2024 were extended only to SME exporters and with maturities of up to 1 year, to both SME and non-SME exporters with maturities of up to 3 years and at affordable costs compared to the market.

In FX loans, SMEs are offered an SME discount of 0.50% basis points in the short term and 0.75% basis points in the medium and long term, while in TL loans, all exporters are offered financing at the same interest rate regardless of whether they are SMEs or non-SMEs. We anticipate that our SME exporters, who have a higher tendency to borrow in TL rather than foreign currency, will prefer our Bank’s TL credit facilities more in an environment where TL interest costs have also fallen, and that this situation will increase the number of SME exporters who will work with our Bank for the first time. In 2025, we will continue to finance the sustainability- themed investments of our exporters that will reduce carbon emissions, increase energy efficiency or reduce the amount of wastewater with cost-effective and long-term resources that we obtain within the scope of bilateral agreements, primarily from the IBRD. In 2025, another issue that we will emphasize will be to increase the volume of interest-free banking products in our portfolio.

Thanks to the good relations we have established with Islamic Financial Institutions, we will meet the investment and working capital financing needs of our exporter companies, especially in foreign currency, by obtaining resources from these institutions with favorable maturities and costs that we can make available within the scope of interest-free banking models. In 2025, our most important development in this area will undoubtedly be the introduction of the CBRT-sourced Interest-Free Banking product to our exporters directly and through Participation Banks. This product, for which we have almost reached the end of the preparation process, will be made available to exporters for the first time in 2025. In addition, we will continue to work on new loan agreements with organizations such as MIGA, NEXI, and AIIB, which will enable our exporters to borrow at favorable costs and maturities.

In order to increase both the number and volume share of SME exporters in our customer portfolio, we offer cost advantages in our credit products and borrow a portion of the funds we obtain under bilateral agreements to be used exclusively by SMEs. In order to provide a solution to the problem of access to collateral for SMEs, we make a large portion of the guarantee packages we obtain from guarantee institutions available only to SMEs. We also allow SMEs with good export performance to borrow with alternative collateral such as sureties, real estate mortgages, and assignment of insured export receivables, as in conventional banks. While the share of SME loans in total loans was 20% in 2024, this ratio rose to 28% in the first two months of 2025.

IN WHICH SECTORS DO YOU SEE MORE POTENTIAL FOR TÜRKİYE TO SUSTAIN ITS GROWTH IN EXPORT MARKETS AND WHAT KIND OF SUPPORT DO YOU OFFER AS EXIMBANK TO ENCOURAGE EXPORTS IN THESE AREAS?

Some of the problems that emerged after the pandemic, mainly due to disruptions in the supply chain, and the fluctuations in the global economy have shown how important green and digital transformation-oriented high-value-added manufacturing industry sectors are for achieving sustainable high growth rates. In this context, technological developments and increases in total factor productivity achieved by increasing the adaptability of the labor force to these developments have become one of the main elements of high value-added production and long-term high growth.

In this context, the defense industry, the high-tech computer and electronic products sector, the chemical sector, which provides intermediate inputs to most manufacturing sectors, and the medical products and pharmaceutical sectors stand out. Ensuring digital transformation focused on artificial intelligence applications in these sectors and increasing R&D efforts will make significant contributions to our country’s sustainable growth and increase in welfare. The transformation and progress we have made in the defense industry in recent years, which has increased domestic production capacity and reduced import dependency, is the most important example.

It is also important to make the green transformation process efficient and support the transition to a low-carbon economy for sustainable growth. While the EU is the most important market for the automotive sector, which has high competitiveness, is at the upper-middle technology level, and is our most important export sector, harmonization with the ECC will provide a competitive advantage in the exports of this sector. Moreover, the EU is also known to be the most important export market for the textile and garment sectors, which have a critical importance for Türkiye’s foreign trade as they are the most important net exporters. Therefore, faster adaptation of the sectors to the ECC is at the forefront as a factor that may create opportunities.

However, due to the low value-added production structure, increasing R&D activities, and ensuring twin transformation and branding are crucial for the development of these sectors. On the other hand, the services sector, particularly tourism, is of critical importance for the Turkish economy with its net foreign exchange inflows, employment generation, and value-added. In 2024, our exports of services reached 115 billion dollars, growing faster than our exports of goods. At this point, as Türkiye is one of the most important tourism destinations in the world, the tourism sector has recorded significant growth after the pandemic, while there are already development opportunities in terms of high-value-added health and gastronomy tourism. In addition, the IT, health tourism, and logistics sectors are also developing rapidly in parallel with global developments and are among the sectors with significant growth potential.

WHAT KIND OF OPPORTUNITIES DO ALTERNATIVE FINANCING MODELS OFFER, ESPECIALLY IN THE AREA OF SUSTAINABILITY AND GREEN FINANCING? HOW DOES TÜRK EXIMBANK PROCEED IN THIS AREA?

As Türk Eximbank, one of our main approaches to sustainability is to develop various communication and cooperation mechanisms with exporters to offer financing instruments compatible with environmental and social criteria. We closely follow national and international legislation regarding the transition to a green economy and support Turkish exporters’ green transformation investments with the financing instruments we create.

In this context, we collaborate with various international financial institutions to provide sustainability-themed financing resources, develop loan programs, and create low-interest and long-term financing packages to support projects within the scope of green investment. We also evaluate the environmental and social risks of our exporters prior to the utilization of the relevant funds (including our bank’s resources). In addition, we can support the green transformation investments of our companies that prefer interest-free banking products with the resources we provide from the Islamic Development Bank, Emirates Islamic Bank, and the International Islamic Trade Finance Corporation. With the sukuk issuance, we plan to realize in 2025, we aim to expand our interest-free financing products by increasing the resources we provide from capital markets. With successful borrowing transactions, we provide our exporters with sustainable financing opportunities, especially in investment projects.

IN 2024, TÜRK EXIMBANK ACHIEVED SIGNIFICANT GROWTH WITH THE FINANCING AND INSURANCE SUPPORT YOU PROVIDED TO EXPORTERS. WHAT NEW STRATEGIES AND PRIORITIES ARE AMONG YOUR GOALS FOR 2025? WHAT ARE THE INNOVATIONS YOU ARE PLANNING TO FURTHER FACILITATE EXPORTERS’ ACCESS TO FINANCE?”

We attach great importance to ensuring that Türk Eximbank’s support to exporters is sustainable and effective. In this context, in 2024, we tried to provide maximum support to exports by developing alternative solutions to compensate for the difficulties experienced by exporters in accessing financing. We paid attention to supporting strategic sectors with high-added value and SMEs with priority and took action to diversify collateral.

Thanks to our credit collateral diversification practice, which offers advantages in terms of easy access to financing and affordable costs, we ensured that exporters can benefit from Türk Eximbank’s credit programs at lower costs with alternative types of collateral. We tried to meet the financing demands of our exporters for both working capital and investment by making the best use of our borrowing facilities. As a result, we exceeded our target by providing USD 24.1 billion in credit support at the end of 2024.

Thanks to the broad-based policy we implemented in line with our strategy, the share of SMEs among exporters benefiting from the Bank’s support reached 83.4% at the end of 2024, up from 70% in 2020. Although 2024 was a year in which the volume of insurable exports decreased relatively in terms of payment methods, we reached a receivables insurance volume of USD 24.6 billion by the end of the year. Thus, we provided a total of USD 49 billion in credit and insurance support to exporters, our highest level of support to date. In 2025, we will continue to support exports of value-added products. In particular, medium-high and high-tech export sectors, foreign currency-earning service sectors, and SME exporters are among our strategic priorities.

One-Stop Solution for Foreign Trade in 2025, we will accelerate the development of solutions that will enable exporters to conduct foreign trade transactions under the guarantee and through Türk Eximbank. We will also focus on new types of exports such as e-exports and customized financial solutions for service exports. In line with our country’s goal of becoming a current account surplus economy, we will continue to provide more support to companies exporting goods and services from our country and contribute to their sustainable export of more goods and services.