ISO President’s Credit and Currency Reaction
Istanbul Chamber of Industry (ICI) President Erdal Bahçıvan spoke at the regular meeting of the ICI Assembly in January.
Noting that the industrial sector still cannot find enough support to access financing, Bahçıvan said, “The recent measures have caused unpredictability and become exhausting for the parties. The credit procedures, which take the real sector to the point of intimidation, are endless and the activation of the credit cannot be specified”.
THE LOAN TO DEPOSIT RATIO HAS DECREASED TO 85 PERCENT
Bahçıvan said: “While the demand for loans is growing due to the rising costs of our industrialists, the need for working capital and the desire for investment; We also see that some banks are more conservative in lending.”
“In fact, the loan/deposit ratio in the banking sector increased to 120% in mid-2018, but it has shown a decreasing trend since 2019 -excepting the pandemic period- and has decreased to 85% today”, Bahçıvan said, “When we look at the relationship between private sector loans and GDP; This rate, which rose to 79 percent in 2018, decreased to 67 percent by mid-2022. Considering that the rate in question is 110 percent in developing countries, Turkey is far behind in this field.” , said.
EMPHASIS ON ‘COMPANYING IN NEED OF EXCHANGE’
Drawing attention to indirect interest rates applied under the name of commission in banking, Bahçıvan continued as follows:
“Increasing the interest rates of signaling through practices under the name of commission generates serious discomfort in the real sector.
In addition, within the scope of the principle of licization and the use of loans according to their purpose, our companies that really need foreign exchange and have high credibility should not be victimized, and age should not burn alongside the exchange rate, so to speak.”
SITE ALSO FOR INSURANCE COMPANIES
Bahçıvan said: “Since the urgent need is to solve the problem of access to credit in the short term, the dependence of our economy on credit is such an important structural problem in the long term.”
“The Turkish economy should emerge from a structure that accelerates when the supply of credit increases and stops when the flow of credit slows down.
In this context, we believe that policies to promote mergers and acquisitions are important to strengthen the capital structure of our companies through economies of scale.
In the same way, increasing the variety of financing instruments and reducing the dependence of our industry on the banking system is a very basic need today”.
In his speech, Bahçıvan also referred to a current problem in the industrial sector originating from insurance, saying, “Some insurance companies do not want to insure the industrial facilities that they insured under the same conditions now, and have increased the rates of their insurance companies. insurance policies at astronomical levels by exaggerating and abusing potential risks. It is extremely important for our productive life that the Ministry of Finance take the necessary measures to solve the problem”.