TURK EXIMBANK'S INTEREST-FREE FINANCING PROCUREMENT AND ALTERNATIVES OFFERED

Abstract

Türk Eximbank has been providing interest-based financing to exporters for many years in order to support exports. Considering the interest-free financing needs of exporters, Türk Eximbank was authorized to offer interest-free financing with the contracts used by participation banks in 2019. Based on this authorization, Türk Eximbank offers some interest-free financing products to exporters. Since it is obligatory to provide interest-free financing for the use of these interest-free products, Turk Eximbank procures interest-free financing from the Islamic Development Bank or its subsidiary, Islamic Trade Finance Institution. A method called the ""two-step murabaha"" method is used in the procurement of financing. This method is used with two different murabaha agreements between the Islamic Development Bank (or its subsidiary), Turk Eximbank and exporters. In the article, the two-step murabaha method used between the Islamic Development Bank (or its subsidiary) and Turk Eximbank is explained in detail. Apart from the two-step murabaha method used, Türk Eximbank can obtain interest-free financing from supplier institutions through different methods. These methods are ""vakala investment"" and ""mudaraba partnership"" methods. In the article, detailed explanations are given on how Turk Eximbank can provide interest-free financing with these methods. The purpose of writing the article is to diversify the interest-free financing supply methods by offering interest-free products that are legally suitable for Turk Eximbank, apart from the method it uses.