16.11.2017 İstanbul
Speaking at the Global Participation Finance Summit (GPAS İSTANBUL 2017), TOBB President M. Rifat Hisarcıklıoğlu said that while the industry has taken important steps to improve the participation system, the industry has outperformed the classical banking system twice over in the last 10 years. Hisarcıklıoğlu emphasized that the participation banks work more closely with SMEs and said, “We also expect support from the banks in our struggle with high interest rates.”
The Global Participation Finance Summit
(GPAS ISTANBUL 2017), held under the auspices of the Republic Presidency organized
by the Turkish Chamber of Commerce and Industry (TOBB), the Association of
Independent Industrialists and Businessmen (MUSIAD) and the Turkish
Participation Banks Association (TKBB) with support from the Prime Ministry
Undersecretariat of Treasury, the Central Bank of the Republic of Turkey, the
Banking Regulation and Supervision Agency (BRSA), the Capital Markets Board
(Turkey), Religious Affairs Department and the Council of Higher Education
(YÖK), was held at the Istanbul Haliç Congress Center. TOBB President M. Rifat
Hisarciklioglu said in his speech that Islamic religion emphasized social
justice from the very first day, saying, “The establishment of justice, in line
with this principle and wisdom of Islam, is primarily the duty of Muslims.
Today, unfortunately, income inequality throughout the world is continuing, not
decreasing. Poverty is becoming a growing problem; there is no amelioration.
Most Muslim countries are affected.”
Turkey has taken important steps in the
sense of improving the participation system. The institutional structure of
Participation Banking has been strengthened. New participation banks were
established with public support. New instruments like participation insurance
have been passed down. Eventually, the participation banking sector doubled in
growth compared to classical banking in the last 10 years (06-16). In this
period, the asset size of the banking sector increased 6 times, while
participation banks grew 13 times over. Its share in the financial system
increased from 3% to 6%. For 2025, they have very ambitious goals. This ratio
increases to 15%, which is a target that excites and motivates us as the real
sector. Because, of loans given in the classical banking sector, the share of
SMEs is 25%. In case of participation banking, this ratio is 35%. Participation
banks work more closely with SMEs. Their growth, in fact, means SMEs' growth as
well as facilitation of access to finance. Tte trend in this direction is
strengthening throughout the world.”
- What did TOBB accomplish in this field?
As TOBB, Hisarcıklıoğlu said that
especially SMEs took important steps, which provided loans with no interest or
very low interest rates, saying:
"With the support and initiatives of the
President of the Republic, Prime Minister and Minister Mr. Mehmet Şimşek, the
projects came into being in 2017, giving vital support to SMEs. The gears of
the economy were made to turn. First, Chambers-Exchanges in 81 provinces and
TOBB brought together all their resources. We reached an agreement with the banks
and provided 10 lira of new credit for SMEs for every 1 lira we collected. The
loan interest rate is 9.9% per annum, the lowest interest rate ever applied to
commercial loans. When we take inflation into consideration, it was essentially
a zero-interest loan at that time. So far, the real interest rate is even less.
We took the second step with the Ministry
of Industry. Through KOSGEB, a 50,000 TRY, interest free loan with a 3-year maturity
has been made available. In step 3, Credit Guarantee Fund (KGF), the co-founded
by TOBB, has increased its credit guarantee volume with the support of the
Government. The credit guarantee limit of the KGF has been increased to 250
billion liras. Together, these three projects, have been utilized by a total of
653,000 companies -the majority of which were SMEs- were able to use a total of
232 billion Turkish liras in bank loans throughout Turkey.
The number of active companies in Turkey
is approximately 1.2 million. Thus, TOBB and the Chamber-Exchange community
have enabled access to interest-free credit to 1 out of every 2 enterprises.
With the President’s announcement, we have made an innovation in financing. We
now want to see similar steps from our banks. We are waiting for their support in
the fight against high interest from them.”
Deputy Prime Minister Mehmet Simsek said
in his speech, “I especially urge participation banks: Let's forget the easy way
out, let's create a business model that includes more innovative, real-meaning
partnerships. You will see all kinds of support in this regard.”
Şimşek said that the world needs a finance
model of participation. Minister Mehmet Şimşek noted that in the past several
centuries, the traditional system has ran into excess and has caused havoc in the
real economy when it fell into crises and that these crises have been
experienced yesterday in the traditional system and that they can be
experienced today and tomorrow.