LATEST SITUATION IN EXIMBANK SUPPORTS

Sedat KOCABIYIK
Customs Consultant
 

Turk Eximbank, the only official export promotion organization of our country, operated under the title of State Investment Bank until 21.08.1987 for the main purposes such as diversification of export goods, opening up to new markets and increasing market share in exports, and on the same date, Türkiye İhracat Kredi Bankası A.Ş. (“Türk Eximbank”). Türk Eximbank has a total of 3 Regional Directorates, 20 branches and 12 liaison offices in Istanbul, Ankara and Izmir.

Türk Eximbank provides manufacturers that produce goods for export, companies that engage in foreign exchange earning activities and all exporting companies to benefit from the following incentive elements:

• Rediscount Credit
• Buyer Credit
• SME Export Preparation Loan
• Investment Loan for Export
• Specialized Export Credit
• Pre-Shipment Export Credit
• Credit Insurance

These incentive programs need to be examined one by one to learn the scope and content.

• Rediscount Credit

Rediscount credit is a type of loan provided to manufacturers that produce goods for export, companies that export foreign exchange-earning services, and all other exporting companies. It is possible to use the rediscount credit in Turkish lira or foreign currency, and the upper limit is 400 million USD for Foreign Trade Capital Companies and 350 million USD in total for other companies, in Turkish lira or foreign currency. Loan applications can be made to Eximbank General Directorate, Ankara Regional Directorate and Izmir branch.

If the application is approved, the loan will be granted by taking into account the delivery of guarantees, delivery of documents and Eximbank resources specified in the application principles for loans granted from Eximbank resources. For loan transactions that require CBRT approval, they are made available following the delivery of the guarantees and documents specified in the application principles and the approval of the CBRT.

• Buyer Credits

These are loans provided to foreign buyers who plan to import from our country and to employers of contract projects undertaken by our companies abroad. Within the scope of the buyer loans program, foreign buyers who want to import goods and/or services from our country through the foreign branches, affiliates and correspondent banks of domestic banks, and reputable banks located abroad that have been allocated a credit limit by Eximbank, and within the scope of the state guaranteed buyer loans program, It is provided to foreign public institutions that plan to import from our country.

Buyer loans are provided in two types.

• Domestic Banks Buyer Loans

The loan program can be used by foreign buyers who agree to borrow money from domestic banks' branches, affiliates and correspondent banks located abroad. The loan is provided through foreign branches, subsidiaries and correspondent banks of domestic banks. Within the scope of the loan, consumer and capital goods of Turkish origin exported from Turkey are benefited.

Loan applications are made directly by foreign buyers to the branches, subsidiaries and correspondent banks of domestic banks abroad. A minimum maturity of 6 months is allowed for the loan, and support is provided with a maturity of 2 years for consumer goods financing and a maximum of 10 years for capital goods financing. In this regard, Eximbank has allocated limits to commercial banks.

• Foreign Banks Buyer Loans

Foreign buyers can benefit from the loan program if the banks established abroad, to which a limit is allocated by Eximbank, accept borrowing on behalf of foreign buyers. Loan applications are made directly by foreign buyers to banks abroad to which limits are allocated by Eximbank. The application is transferred to Eximbank by this bank.

Within the scope of the loan, Turkish origin consumer and capital goods and service exports from Turkey are benefited. For transactions with a credit maturity of less than 24 months, bank financing can be up to a maximum of 100% of the contract value of the export from Turkey.

However, in accordance with the OECD Consensus on Officially Supported Export Credits, bank financing is limited to 85% of the export contract value for maturities of 24 months and longer. The remaining 15% of the contracts in question must be financed by the foreign buyer or the foreign bank itself.

The countries with which loan agreements have currently been signed by Eximbank are Albania, Azerbaijan, Belarus, Georgia, Kyrgyzstan, TRNC, Mongolia, Uzbekistan, Russia and Ukraine.

• SME Export Preparation Loan

Our exporter SMEs and our manufacturing SMEs that produce goods for export (final producers only) benefit from the loan. Although there is no lower limit within the scope of the loan, it is possible for applicants to use a loan of up to 5,000,000 USD.

The loan's maturity options vary and a grace period advantage is offered. It can be paid in 4 equal installments for a maximum of 720 days. It is possible to use the loan in USD, GBP, JPY and EURO. Loan application is made directly to Eximbank General Directorate.

• Export Preparation Loan

Except for Foreign Trade Capital Companies (DTSŞ), Sectoral Foreign Trade Companies (SDTŞ), our exporters and manufacturers producing goods for export (final producers only) can benefit from the export preparation loan. Although there is no lower limit for the export preparation loan, the upper limit is up to 25 million USD. The loan's maturity options vary and a grace period advantage is offered. It can be paid in 4 equal installments for a maximum of 720 days.

It is possible to use the loan in USD, GBP, JPY and EURO.

• Specialized Export Credit

It is possible for companies producing goods for export to benefit from this type of incentive, which provides medium-term financing for goods and service projects that cannot be credited within the framework of the bank's existing loan programs, but are deemed suitable by the bank. There is no lower credit limit. The credit limit is evaluated by the bank on a project basis.

Manufacturers, manufacturer-exporters and exporters resident in Turkey who produce goods for export and who have the qualifications required by the funding institution provided from abroad can use the loan.

• Pre-Shipment Export Credit (SÖİK)

Exporters, manufacturers, free zone users and companies located in Turkey and engaged in foreign exchange earning activities located in Turkey and the Turkish Republic of Northern Cyprus (TRNC) can benefit from the loan.

Credit;

• Sales and deliveries considered as exports,
• Transit trade,
• Export of imported goods,
• Exports made within the scope of barter and tied transaction,
• Free export,
• Exports made within the framework of border trade provisions,
• Exports to duty-free warehouses,
• Exports to free zones (excluding the part of exports from Turkey to free zones sent to third countries),
• Sales made from the free zone to Turkey or other free zones in Turkey,

It is not used for.

Within the scope of the Pre-Shipment Export Credits Program; The total principal balance of TL and foreign currency loans extended to a company cannot exceed 25 million USD. The company limit in question; SÖİK Participation is limited to 15 million US Dollars within the scope of TL/SÖİK Participation Foreign Exchange loan, and 5 million TL within the scope of SÖİK TRNC TL loan.

The loan is denominated in TL and is only available to companies that qualify as SMEs. For each loan application, companies must apply to intermediary banks with the relevant set of documents available on the Türk Eximbank website.

• Credit Insurance

The purpose of Credit Insurance is, on the one hand, to encourage and direct exports by securing the export proceeds of our exporters' short-term sales against commercial and political risks within certain limits, and on the other hand, to facilitate the obtaining of export credits from commercial banks by providing the policy as collateral.

All our exporters with a deferred receivables structure for sales made abroad can benefit from this program. With Credit Insurance, deferred sales made for up to 360 days are covered. There is no upper limit in credit insurance. 238 countries are covered by Short-Term Receivables Insurance. Armenia, Southern Cyprus and North Korea are considered out of scope countries.

Other Things to Know About Türk Eximbank

Turk Eximbank supported 44.1 billion dollars of our export figure, which was 171 billion dollars in 2019, that is, it alone supported 25.7% of our country's exports in 2019 and provided less risky and low-cost loans to our exporting companies.

The number of companies using the bank's loans and receivables insurance services in 2017, 2018 and 2019 and the amount of support provided are shown in the tables below.

Türk Eximbank has launched the "Stock Financing Support Package" in order to reduce the negative effects that may occur if our exporters are unable to export their products due to reasons such as order cancellations and decrease in demand during the Covid-19 epidemic. The Stock Financing Support Package is made available to exporters with the credit guarantee fund guarantee originating from the treasury. SME and non-SME companies can benefit from the stock financing support until 31.12.2020 and it can be applied for a maximum term of 36 months, and the principal grace period is a maximum of 6 months.

In addition, two new incentive packages named "Overseas Letter of Guarantee Program" and "Insured Receivables Collateral-Based Loan Program" have been implemented.

a) Foreign Letter of Guarantee Program

With the program, our contractors and exporters will be able to obtain letters of guarantee from Eximbank for their overseas projects. In this way, companies operating in the contracting and shipbuilding sectors and companies producing investment goods for export in the country will be supported to ensure their permanence in existing markets and to expand into new markets.

b) Collateral Based Loan Program for Insured Receivables

The credit program will be available to manufacturers and all exporters who produce goods for export. The insurance receivables of our exporting companies will be accepted as collateral and financial support will be provided for up to one year, regardless of the shipment maturity. With this new application, it is aimed to increase companies' forward sales opportunities and ease their cash flows.

As can be seen, Turk Eximbank has a huge share in the development of our country's exports, diversification of export products and protection of exporters from external factors. It is clear that our foreign trade volume will increase, as well as the competitiveness of Turkish products in foreign markets, as companies that export or will export, research and benefit from Eximbank support elements.

Source:

https://www.eximbank.gov.tr/

Turk Eximbank 2019 Activity Report

QUESTIONS AND ANSWERS

Question 1. Who can benefit from Eximbank Export loans?

Answer: Our exporter SMEs and manufacturer SMEs that produce goods for export (final producers only) can benefit from this support element.

Question 2. What are the advantages of companies having receivables insurance?

Answer: If our companies want to export to new markets other than the markets to which they regularly export, the receivables of the exported product are insured against the commercial and political risks that may occur in these new markets, and the uncollected part of the receivables is paid to the exporter by Eximbank.

Question 3. Does Türk Eximbank provide loans only to companies that export abroad?

Answer is no. Turk Eximbank supports manufacturers producing for export, companies exporting foreign exchange earning services, and contractors/investors operating abroad with short and medium-long term cash loan programs.

Question 4. Why should export companies prefer Turkish Eximbank export loans instead of public banks?

Answer: Turk Eximbank A.Ş. It is an organization directly affiliated with the Ministry of Commerce and is audited by BRSA (Banking Regulation and Supervision Agency). Public banks operate under the Ministry of Treasury and Finance. Turk Eximbank should be preferred because it is the bank that follows export transactions directly, knows the problems of exporting companies very well and takes action accordingly in the fastest way, and above all, provides lower cost loans compared to other banks.

Question 5. Are there Eximbank type banks in countries other than Türkiye?

Answer: Yes. For example, "Euler Hermes Aktiengesellschaft" in Germany, "Servizi Assicurativi Del Commercio Estero (SACE)" in Italy, "China Export & Credit Insurance Corporation" in the People's Republic of China, and Turkish Eximbank in Turkey support exporters. provides.