Financing Options and the Banking System in Turkey

Turkey’s banking sector consists of deposit banks, development and investment banks, and participation banks. Participation banks operate on interest-free banking principles, aligned with globally recognized Islamic finance rules.

Lending Principles

• Banks may extend cash and non-cash loans (e.g., guarantees) in Turkish Lira or foreign currencies.
• Restrictions:
  • Individuals cannot receive foreign-currency loans for non-commercial purposes.
  • Residents must obtain foreign loans through banks established in Turkey.

Alternative Financing Methods

• Leasing (Financial Leasing): Allows companies to use investment goods without purchasing them outright. Types include domestic leasing, cross-border leasing, and sale-and-leaseback. Assets such as real estate, vehicles, IT equipment, medical devices, machinery, and office equipment are commonly financed this way.
• Factoring: Enables firms to sell their receivables from goods/services to a factoring company, ensuring instant cash flow. The factoring company assumes collection risk.

International Financial Institutions

In addition to local banks, several international development banks provide financing for projects in Turkey, including:

• EBRD – European Bank for Reconstruction and Development
• EIB – European Investment Bank
• IFC – International Finance Corporation

Key Institutions & Resources

• Banking Regulation and Supervision Agency (BDDK): www.bddk.org.tr
• Banks Association of Turkey (TBB): www.tbb.org.tr
• European Investment Bank (EIB): www.eib.org
• International Finance Corporation (IFC): www.ifc.org
• European Bank for Reconstruction and Development (EBRD): www.ebrd.com