Para piyasasında banka dışı mali kesimde finansal farklılaşma: Factoring, forfaiting, leasing ve özel finans kurumları
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- Tez No: 43632
- Danışmanlar: PROF.DR. NAZIM EKREN
- Tez Türü: Yüksek Lisans
- Konular: Bankacılık, İşletme, Banking, Business Administration
- Anahtar Kelimeler: Faktoring, Finans kurumları, Finansal farklılaşma, Finansal kiralama, Forfaiting, Para piyasası, Sermaye piyasası, Factoring, Financial institutions, Financial differentiation, Financial leasing, Forfaiting, Money market, Capital market
- Yıl: 1995
- Dil: Türkçe
- Üniversite: Marmara Üniversitesi
- Enstitü: Sosyal Bilimler Enstitüsü
- Ana Bilim Dalı: Belirtilmemiş.
- Bilim Dalı: Belirtilmemiş.
- Sayfa Sayısı: Belirtilmemiş.
Özet
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Özet (Çeviri)
CHAPTER I FINANCIAL SYSTEM INTRODUCTION 1-1 Financial System 1.2. Financial market 1.3 General Structure of Financial Organisation in Turkey 1.4 Money Market 1.5 Capital Market 1.5. İ Capital Market Institutions 1.6.Undevelopment Reasons of Financial Market Institutions Out of Banks in Turkey 1.7 Development Level of Financial Markets in Turkey and Their Comparison with International Financial Markets. CHAPTER II : NON-BANK FINANCIAL SECTION 2.1.1 SAVING BANES 2.1.2 SAVING AND CREDIT UNIONS 2.1.3 CREDIT UNIONS 2.1.4 INSURANCE INSTITUTIONS 2.İ.5 FINANCEMENT COMPANIES 2.1.6 INVESTMENT COMPANIES 2.İ.7 BANE OF PROGRESS 2.İ.8 PARTNERSHIPS OF INVESTMENT TO IMMOVABLES 2.1.9 RISK CAPITAL CHAPTER III FACTORING AND THE FINANCIAL ENVIRONMENT 3.1 DESCRIPTION 3.2 MECÎÎANISM KINDS OF FACTORING PROCEDURE 3.3 PRINCIPAL KINDS OF FACTORING PRODECURE 3.4 FACTORING AND ITS APPLICATION IN TURKEY 3.5 FACTORING AND ITS CONTRIBUTIONS TO THE ECONOMY OF THE COUNTRY CHAPTER IV. FORFAITING AND THE FINANCIAL ENVIRONMENT 4.1 DESCRIPTION 4.2 MECHANISM OF FORFAITING. 4.3 FORFAITING AND ITS DEVELOPMENT IN TURKEYCHAPTER V. LEASING AND THE FINANCIAL ENVIRONMENT 5.1. DESCRIPTION 5. 2. MECHANISM OF LEASING 5.3. KINDS OF LEASING OPERATION 5.5. PROFITS DUE TO LEASING ? 5. 6. LEASING, CONSIDERED IN FINANCIAL AND ECONOMICAL ASPECTS FOR TURKEY CHAPTER VII. PRIVATE FINANCE CORPORATIONS AND FINANCIAL ENVIRONMENT 6.1. OBJECTIVES OF ESTABLISHMENT IN OUR COUNTRY 6.2. SOURCES OF PFC AND THEIR USE ? 6.2. i. PRIVATE CURRENT ACCOUNTS 6.2.2. ACCOUNTS OF PARTICIPATIONS 6. 3. PFC AND GENERAL EVALUATIONFINANCIAL SYSTEM Introduction It is necessary to follow how the developrants and expectations in international financial markets show trend. and research their applicability in the markets in order to be able to evaluate the expectations and possible developments in the Turkish Financial Markets that integrate with developed country economies and play role in canalizing the international capitals and funds into our economy, in those days in which we move to the 2000' s rapidly. It has been accepted that deregulation technological developments and globalisation are most important three experiences behind the observed developments in the world money and capital markets in 1980's. Turkey is becoming attractive day by day for the internationaly capital and finance environments because of banking sector open to internal and external competition as a result of restructuring in or financial markets within ten financial year, developed money markets security exchange that is developing rapidly, attractive foreign capital fundamental subjects.a powerful and independent Center Bank and consequent moneter policies, a limitless foreign exchange regime and a liberal importation regime, developing foreign trade volume and incentive measures that cause consumer explosion. Parallel to these mentioned ones and besides the instruments that have been used in the Turkish Financial System, the new national institutions and establishments with the new instruments will provide the Turkish Financial Market to integrate with the world countries, and have power. For this purpose the subject I have chosen will be a source for the persons who follow the developments in this sjb.ject as it evaluates the Turkish Financial Markets within money market and examines the new instruments and interactions of market.-2- ı.ı FINANCIAL SYSTEM Financial system is a system established by joining o£ delinite institutions and markets in the developed economy in order to realize some basic functions that effect each other. system provides effective and continous flow of units that save and use funds by bringing ones that present funds and demand funds together. A developed financial system, while performing fund transfering function realises the term, amount and risk arrangements on conditions that the funds will be covered ih the most productive sources.-3- FIWANCIAL MARKET The institutions that arrange flown between onen that uw funds and present funda in a country and structure consists of legal and administrative rules1 that arrange instruments providing the flow in called an financial market. While persons, enterprises and government ?>rr demanding fund from the financial marketn in order to realize investments suggested hy them.persons and enterprises prenent the fundn to the market that are turned to oaving hy them. In thin way a fund turnover in realized in the financial marketn. According to this we can collect the financial institutions that establish a connection between ones that prenent fund and demand fund. under there titles: i) Financial inntitutionn that invent money - T.R. Center Bank - Deposit Bankn - Private Fundamentel Subjects Banks ii ) Financial Inntitutionn that do not create money -Investment and Development Bankn -Social Security Inntitutionn -Insurances -Credit and Guranty Cooperatives iii) Inntitutionn that give service to the Capital Market - İstanbul Stock Exchange - Stock Brokers i.3) General Structure of Financial Organisation in Turkey It in possible to show the general organisation structure of financial area in Turkey an in figure 3.-4- F İNANCI AL AREA BANKING AREA MONETARY COMPENENT INSTITUTIONS DEPOSIT BANKS OTHER FINANCIAL INSTITUTIONS DEVELOPMENT INVESTMENT BANKS CENTER TREASURY BANK PUBLIC PRIVATE SOCIAL SECURITY TNSTS BANKS BANKS INSURANCE COMPANIES COOPARATTVES COLLECTIVE SAVING TNSTS. 1.4) HOMEY MARKET The market in which short termed fund supply and demand meet is called Money Market. Money market han an arrow and technical quality than financial market concept and generally taken place in the financial market. The? typical pccularity of money market is it's generally formed by short termed funds less than one year. Funds obtained from the money markets are used as credits in the financements of revolving assets of enterprises. Accumulations of saving owners and various deposits in banks establish ' the sources of money market. 5..4.1 Money Market Institutions I. Institutions that arrange money market a) TCMB b) HDTM c) Turkey Banks Union d) Savins Deposit Insurance Fund-5- II.Banko a) T.R Center Bank b) Commercial Banko c) Development: Banks d) Investment Banks c) O-Shore Banks III Financial Area ot.it of Banking a) Finance Hiring Companion b)Forfaiting Companion c) Factoring Companion d)Privato Finannr Institutions 1.5 Capital Market Capital market in a market in which medium and long termed fund suply and demand meet. In general it consintn of every kind of buying and selling of stock and share such an credit.foreign exchange, share certificate, debenture bonds, gold etc. Capital markets) assist to companion to market share certificates and debenture bondo easily when source insufficiency exists, and at the same time while spreading production property they provide attractive income possibilities for the small saving owners. Credits obtained from this market in used mostly in financement of fixed assets of enterprises such as building. machine and equipment. Funds obtained from new capital market arc used in providing fixed capital need, and consists of two sections. a)Firnt market: This in a market met by companies that export stocks and shares such as share certificate, and saving owners that buyers. b)Secondary market; The persons who buy shares and stocks from export cannotapply to exportation companies never for the share certificates and for debenture funds before due date when they want to turn them to monev.The secondary market provides shares and stocks in thin situation to be turned to money. and shares and stocks exchanges İd a bent example to know thin market. Secondary market by increasing the liquidation of shares and stocks creator) a demand for the first market. i.5.1 Capital Market Institutions We can examine the capital market Institutions under three sections: i. Institutions that arrange Capital Markets a) Committee of Capital Market b) Treasury and Foreign Trade Councellorship c)Türkish Republic Center Bank 2. Capital Market Institutions a)3tock Brokers b) Investment Funds c)Investment Partnerships d)Portfolio Management e) General Finance Partnership 1 1 1. Stock Exchanges a)İstanbul Stocks and Sharer. F.xchange b) Valuable Metals Stock Exchanges i.6 Undevelopment Reasons of Financial Market Institutions Out of Banks in Turkey-7- Competition and a good cnformation nyotem is noceooarry for the development of financial markets. Effective and equitable data turnover related to the companion and presenting confident information to the inventor increase the competition between financial market institution. As a roult of this productivity increases, rationalisrnoccuro in source distribution and important decrease? in fund transfcring coot. Financial Market institutions has not been developed in Turkey except banking. Saving institutions out of Commercial Bankt. financial institutions that give consumer credits. Intelligence institutions. etc do not exist in Turkey. Recently establishment workings of rating institutions are being continued. (1?) The reasons of why banking is prevailent institution in Turkish financial market can be explained as f ollows. ( 1 8 ) a)During development process of financial market and industry in Turkey, many things are hoped from banking and so big authorisations are given to the banko. While competitor institutions are tried to be established against to banks, tnarty faults are made. For example in 1982' s a bankership situation occurod and as a result of this, unjust application against to banko was performed, bankers were colleced deposits like bankn but did not set the added equivalents of deposits as banko. The fault is mixing of functions. Money market and bankking was mixed each other. The other fatslt wan to hope that legal organisations would develop the market alone. c)Commorcial and industrial sections in Turkey were realised by the closed family companies. Companion tried to develop by excess debting and restricted autofinano.ing. Acs mentioned before, negative interest applications before 1980' o made attractive excess debting. Interests were increased in i960' s but increase profitability in inflational environment and excess value increments of realeotates prevent company owners to open to the public.-8- ı.7 Development level of financial markets in Turkey and their comparisons to international financial markets. An real estate investment funds have not been developed yet, other financial instruments are vised ooporately. İn thio view, the rate of turning of savings to financial instruments in rather below the potancial.Thin situation alno reflects to economical development. (19) Differentiation in financial area by changing the monopol situations of banks will provide competition and have an effect on decreasing interer.tr.. The two situation should be considered during institutional varieties. l.ît io ncccooarry that intoresto should reflect time, risk and inflation mcann. 2. The poonibîlity of long termed financing by the institutions io very low, in cane of inflation environment. For this reason interests of government debenture without risk should be kept lower than the interests of instruments with rink for the institutional differentiation. Besides government internal debts should be lowered and economical sources ohould be freed. The institutions that provide short termed financing during high inflation and interrest environment ohould become first. Stocks and ohare funds is an inotitution that provides short termed financing but it is necesoarry to consider thin inotitution out of banko and provide activity to the money market. For this reason rating institutions are needed. Inotitution that provide longer termed financing ouch as thrift inntitutiono, saving and loan associations, investment partnerships! and especially real estate investment fundo should take place in the financial area differentation in time._9- In our country public section taken place in our economy actively and has an effect on market eventhough free market economy in applied. Because public section, by exporting public finance instruments with low risk by high ree interest, prevents decreasing of interests and oecuring of new and different finance institutions out of banko. During high interest and.inflation environment in Turkey it is normal to have finance institutions that provide shorttermed finance. For this reason it io difficult to have finance institions that provide long termed financing. In Turkey only the banks have right to sell the participation documents of portfolio formed by money market vehicles such as money market mutual funds which is short termed money market institution, f inancement bunds (commercial paper ), treasury bund, government debenture bunds, bank shares and stock certificate etc. In case the authorization is given to institutions out of banks to use and market such and market such kind of funds, competition and productivity in financial will increase. Social Security Institutions in Turkey hold their money in Public banks or. invest to government debenture bonds as they are public originated and as a legal obligation. But this restriction effects these institutions in a negative way because of low advantage and as it restricts its role in capital market. In our country insurance companies especially life insurance have not been developed. As there are insufficient funds in their hards and deposit collecting authority belongs to only banks insurance companies can not show any activity in the capital markets as a source collector and theoretical investor. Capital market institution sample does not exist in the foreign countries as in Turkey. In general thrift institutions, building societies, credit unions, saving and loan associations use longer termed fund. Besides investment companies, finance partership and real estate investment funds have not been developed in Turkev.-10- Real estate investmont funds neod a great capital.Now bankn have roal ostateo of cornpan.icn from whiah thcy could not take haok their nrr?dits,a0 a guarantee. For this roason public can bo thc partner of their incomün.Whrn thc low incomod amali oaving owner beeomeo the partner of high value incrementn in real eotates during inflationalünt cnvironmrnt,inoomp distribution will br effeoted in a positive way. SEÇTİON îî NON BANK FTNANCIAL KECTÎON 2.1 NOM BAMK FINANCTAl. IMTF.RMBDTARIRfl Such kind of f inançla l i.ntprmodiarirTi are callod non bank financial intermcdiarieo. Tht? main ppcularity of thesıe non bank financial inotitutJonr. in that they no not have diroct rclation with Center Banka and can not create bank money (I). Non Bank financial inntitutionn lend the fundo thoy collected to thc ones that demand fvınds,without croating buying power. Non bank financial intcrmodiaries can öpen credit by the buying powor obtained from commcrcial banko,depooitö ownoro,moncy market they can use the liqu.id.ii-y they collected in lend procedures and rcal estate inveotmentn.like life inourance companico.Ao like inotitutions that finance real ootate construction, conaumption credit and agricultural rqııipmcnt,can opon credit to onro that obtain only reel valucs b the fund thny borrowed. Thoy can operato the oavings of depooit invootoro and partnrrohipn likc investment partncrohipr, and invcstmc?nt inotitutions.Thpy can carry out credit,oale and purchane proceduros of partnere likr cooparativps. Croditn oponpd by non bank financial intcrmediarios dopend on oavinga madç1 bofore.Bocauoc thone inotitutionn hnvo not ponnibility to nroate monoy. Ropr»Rİally wr ?5rc varioun namplen of Non ban k Intormcdiariro in US Credit uniono that partly donond on to tho govommont and altso havc ö juridisl pcroonalîty,rtıt-ahlioh thr grrat part of these inntitutionn that havo an important place withi.n othor monoy market institutiona.-11- Thono inntitutionn canaliîîo tho fundn to tho pornonst whn nupply fund as agrieulturo and hotıno crodit. thooe inotitutions mako ponoible th<? ft.andn to be unod in long tprmpd financement markot and thin pemjlarity differn thr-m from banko and they tnko place in thrift inotitutions. We can examino tho institutionsı in dcvrlopcd financial markets under 7 soction. 2.1.3 Saving hankn Thry are thp banko foısndrd f ör purposıp of anninting nma.11 naving ownero that can not inorcaso thoir navingn.All tho capitalo of thonc banko consiot of depocatn that aro invoatod and doponit ownora arc tho partnere of bank._2.1. J S&VIHG BAHKS Thcoe aro tho banko eotablinhpd in order to help the owners of navings of small auantitieo, who do not know how to make thoir oavingo morc valuahle.Tho oapital of thio kind of banko io entirely formed of tho depooito and thc ovmers of thc oaid doposito aro aloo in oate of partncrrs of thone banko. Saving banko crcate inveotmento at a fixed dato in largc nuantitico, jvınt nn thr nommcrcial banko do.But thr mont promincnt differoncos cxintin§ bctwcen th<?n<? two kindîî of banko appoarn at thenp point.Rccaunîc tbc comrnrrnia] bankn crrat both invoctmcnt at a fixcd dato and curront dcponito at thc name time (3) Fundo collccted by navingo arc invented to movable valuro and to otber fiels whinh providc revenı.tc and thc bencfit ohtatncd form thenc invcntmentrs io dintributcd among the ownrd of savingn. (4> The 9O % of the fundn ia formed of dcpooito at a fixed dnto and the remaining, of cap.ital reoorvoo and of not ohared bcnefito.The kinda of establishmpnts renemblo to coopcrativen.They are distributing profit oharcs amone the ownern of deponits. (6) Greditr given by the navingn banko are determined by laws concerning the avability of the fundn and aro undcr the control of thc Statr.Thoy nan not rcalir.c p.1accmrnto,othcr than thone mentioned on thc Vint fixed by the Taw. Exclxıoivcly they can rea.li?.c placements(inve5tistnonto) to atate's bonds and to bondn isouod by local rogional adminiotrationo and to sharp billsj portaininie to companios which havc continiovıoly dintributed dividcnd during the bygone yc?ars,to loan oprrations againnt hypothca,to immovableo and to anoeptanooo and policios acceptablea by Federal Banko of Rescrve. Thcy invost the main part of thcir fnnds, 25 credito of immovable againot hypotnec.(7) The legiolation necenrsitates that the owners of accovmto neear oavingo money give, noti.ce to the said banko. Ao otated here abovc, the main port of the funda of oavingo banko io formed of depooitn and they oan not iooue bonds on their behalf. Theoe propertieo reoemble thooe of the r.ommere.ia! bank's. The afor cxplained oavingo banko do not constitute a good oample to Finanrial Tntermediarieo out of the Bank.Becauoe their procedure to collect denonits and to öpen credito.. create an indirect purchaning power._ '>_ 2.î.2 SâVING AND LOAN A8SOCIATIONS Thcse are coopcrativo egtablinhmcnts with natüre of rsfmi-pubîic: îoundationo and they trnnnf^r to people rcquosting funda by forming a fund-pooî Jn ordrr to provide houoing f.insncemcnt and houoe own«?r.«3hip. They opon credits for immovahle purchases againot the funda ool.1cr.trd f rom the owner?! of frhr naving dcpooitsı. Tho purnhar.od İTnmovablcs conntitur tho security for tho crcdit oprnc-d by theoo foundationn.Thc mjîin diffcrrncr nx.iat.ing bctween thin foundationo and tbo banko, irs that.theoe are nonprofit £stablinhmpnta. î n spitc of not boıng. bank thoy may oxcrcc banking activitieîi ao by providing for tho ownrrs of thî? oaving tbn poeoibility of drawing moncy againnt chequf? ör to öpen connumern' credita. 2.İ.3 CREDIT UN1ON8 Thcoe aro conotitvıte by tho partipication of îtomo people.This is a kind of nooporative more aft<?r cncountcred at thp USA.The partnero aan not pascono morc tban tbc % 10 of tbe llnion'cı capital and rcgardlenn tho rate of thcir ohare, oach partnrr han öne vote, Credit Uniono transfer the funda obtainod by borrowing to dcmanders against vcry omall raton ör intcreot.Tho Union provideo for the partioipants the right for borrowin@ and payo a crrtain rate of intercst. The ratc of ântorpgt to be paid to Icndcrn of the Union is not reotricted.Thp rates of intereat to be haid by the borrowrrnı arc nubm.ittrd to ccrtn.in rrntrjctjonö and limitationo. Th<? mptrıberpı of Grpdit Uniono arp forming a group rpstrictod by nortain drfinîtive lim.itn.Thr membern of a Crrdit Union can br. also tho mombora of como rolieiouts eroup ör of a ccrtain congrogation of 2 group of oollegucn. Credit Union aro cspecially showing a diversity parallel to thp devcloppmrnt in thc- USA.În the USA,bpoidr tho commercial banka,Unionn of Dcponit and Credit,Funda of Life însurance, Corporationn of invr-CTtmrnt achirvp the rnoot profitab.lr nhnring of th<? capital ör in othor wordn the tr anafor of tho funda, f rom tho providcrn to the dernandero. in önder to realiso the dir.peroion of thrcapital on the public hanis. In the USA, there are many kind of credit unions supported by the Federal government and which we may consider these, an being saving foundations. These Federally Sponscrcd Credit Agencies are foundations with legal personnality and with a quality of semi-foundation, orienting the collected funds through certain sector. Basically these can be divided into 5 kinds : -The Federal Home Loan Banks -Federal Home Loan Mortgage Corporation -The Federal National. Mortgage Annotation -Farm Credit Bankn -Student Loan Marketing Association -The Federal Home Loan Banko :The congress established the Federal Home Loan Bank System in 1932 to supervise federally chartered saving and can associations and the provide a credit facility for thrift institutions. The system originally comprised only the Federal Home Loan Bank Board, which serves primarily as a regulatory agency. and 12 regional Federal Home Loan Banks, which carry out the policies of the Board and provide the credit facilities and other services for member institutions. The Federal Ravings and Loan Insurance Corporation and the Federal Home Loan Mortgage Corporation were added to the system laterin 1934 and 3970 respectively. The Federal Home Loan Banks are wholly owned by the financial institutions. The 12 banks operate individually but they must observe guideliness astablished by the Board. The most important activity of the banks is to provide credit to members in the form of loans (called advancen)The Federal Home loan Banks are wholly owned by the financial institutions that join the system. The banks operate individually. but they must observe guidelines established by the Board. The most important activity of the banks is to provide credit to members in the in the form of loans(called advances ). The Federal Home Loan Banks finance their advances primarily by selling debt securities nrr- sold on a consolidated basis-that is, they are the joint obligations of all 12 banks.-4 Tho Federal Home Loan Banks are the only sponsored agency that issues deposit liabilities. Overnight accounts are the largest category of deposit liability at the banks. These accounts are used by member institutions to invent temporarily funds tha otherwise might lie idle. The banko also issue demand and time deposits to their members. Federal Home Loan Mortgage Corporation The Federal Home Loan Mortgage Corporation also belongs to the Federal Loan Bank System but performs* a different function than the 12 Home Loan Banks do. Freddie Mac providers a secondary market mainly for conventional mortgage loans, that is. mortgages that are not insured by the Federal Housing Administration nor guaranteed by the Veterans Administration. When the corporation was established in Î970, secondary market facilities for government-insured and government guaranteed mortgages already were in place, but support for conventional home loans was lacking. Freddie Mac was created to fill this gap in the secondary market. It typically purchases mortgages from inotit utions originating the loans. To a small extent, The Federal Home Loan Mortgage Corportion purchases mortgage loans to hold in its portfolio mortgage loans to hold in its portfolio. More commonly, Freddie Mac purchases mortgage loans places them in pools, and issues pass-Through certificates backed by these loans. The common stack of Freddie Mac is owned by the 12 Federal Home Laon Banks. Recognising that ultimately the thrift institutions that are members of the Federal Home Loan Bank SYstem have a claim on its income, Freddie Mac issued $ 1600 million of articipating preferred stock to these institutions in January 1985. The Federal Mortgage Aonoeiation : The congress established The Federal National Mortgage Association in 1938 to provide a secondary market for federally under written mortgages. Fannie Mae was onece part of te federal government, but it was seperated in 19A8 held $ 94 billion in mortgages.making it the largest single investor in home loans in the country. In recent years, Fannie Mae has diversified its activities on both the asset and liability sides of its balance sheet.-5- On the asset side FNMA now invents heavily in adjustable rate and second mortgages. On the liability side, Fannie Mae now issues debt securities in foreign markete and foreign currencies, ergageo in swap transactions (discussed later, ) and offers several new types of debt securities. This sponsored agency also has issued a large amount of pass-through securities, which are not eflected on its balance sheet. Farm Credit Brankti The Farm Credit System has the most complex organizational structure of the five federally sponsored credit agencies. The system is divided geographically into 12 districts. Each district has a Federal Land Bank, a Federal Intermediate Credit Bank, and a Bank for Cooperatives. In addition, a Central Bank for Cooperatives participates in large loans or loans that span more than one district. These 3? banks, along with a large number of cooperative associations that own the banks, form the heart of the Farm Credit System. The Farm Credit Administration, an independent agency of the federal government provides supervision at the national level. The regulatory role of the Farm Credit Administration was increased in 1985 by the Farm Credit Asosistance Act that restructtired the system. This same legislation also gave the Secretary of the Treasury greater authority to provide financial assistance to the Farm Credit Banks. This financial assistance would be advanced to the FCBS through the Farm Credit System Capital Corporation, another branch of the System restructured by the 1985 legislation to ensure the continued viability of te Farm Credit Banks and their lending associations. The three types of Farm Credit Banks and their lending associations differ in the types of loans they make. The Federal Land Banks, through a total of about 300 land bank association, issue primarily longer-term loans for the purchase of farms, equipment or rural real estate. Most of these loans have variable interest rates. The Federal Lanrd Banks and their lending associations account for about 65 percent of the total assets of the Farm Credit System. The Federal Intermediate Credit Banks advance funds to about 200 production credit associations and to other financial institutins,such as commercial banks, that make primarily short-term loans for produevtion or operating purposes. They also write a primarily short-term loans for production or operating purposes. They also write a small volume of loans for farm and rural homes and for farm-related businesses.-6- The Federal Intermediate Credit Banks and their lending institutions account for about ?.?, percent of the total assets of the Farm Credit System. The banks for Cooperatives make loans of all types directly to cooperative organizations providing agricultural services. The services rules maketing farm products, purchasing farm supplies., or operating public utilities. An with the othen Farm Credit Banks, the Banks for Cooperatives ar^ owned by the cooperative organisations that borrow from them. At one time, the Fedaraî Land Banks, the Federal. Intermediate Credit Banks for Cooperatives each issued their own debt in the financial markets. In 1977, they issued their first consolidated debt (that is, a security that was the joint obligation of all 37 Farm Credit Banks, ) and since 1979 all debt issuance has been on a consolidated basis. The Farm Credit Banks tap the short-term markets for a large proportion o their funds because most of their loans have either short terms or variable interest rates. Student Lohts Marketing Armoniatiort The student Loan Marketing Association was created by the Congress in 197?. to provide a secondary market for student loans guaranteed by the Federal. Government. Sallio Mae also encourages the flow of credit to higher education by providing loans to institutions, known as warehousing advances, so that they can write additional student loans. Most of the student loans purchased by Sallie Mae are grented under the Guaranteed Student Loan Program. These loans are originated by private lending institutions (such as commercial banks, thrift institutions, and educational institutions, ) and they are guaranted either directly or indirectly by the Federal government. Sallie Mae also purchases loans granted under other federal programs for higher education such as the HF,AL program (Health Education Assistance Loans) and PLUS program (loans to parents of dependent undergraduate student and to independent students).Tl e) u i i F S ta u o.p r-i -P « 10 TO <j) ü ffl > O U a J O -, «Ö C *H (3 t- ı ~ 10 r- ÛJ O.P o 03 X O.p <0 p (il fî« H p 0) *w Öı K5 E- § <-> O (D U fc C Û) r~l“O _ & c. u. o m U (0 X-ı Sj O t- fi XI C -P -H ~3.p O 01 o c S e ?H E C Tl (3 Sa O.o o x a; D C.P (fi P & 0ı O 2: o c «3 o o (0.8 ?O 0) C0 O > O as m a > 3» o n > g o.H -P 10 İZ C o -3 ÛJ r o -r-S ?P O a: Kİ X p İS (0 - U O' 6) -P O”S3 T3 ti. O £1 O O m m < p o -H O -P rH Oı S3 m îö p © +?> S, ?S k U ® O o -H 03 e u B< «3 c o.H ?P S «3 ¥ «J «H O.H.P ü O -<- * ?s ta w.H re <a B o Di 10 no © O K C C3 -P ? m ıu CO O O“ 4J -. X» «-i & 'O >. u.-ı «3 ^ 2 «3 C 83 C ~* O 4J > ca -H o +j U ü ÛJ ffi.p ıw C «w ra 3 U t-0 m u x: !>. m m ât.in.a «u a c S3 > X! e* ?ca «s ”U S m ta w ta < -H ° 8 01 o p E nj tu di XI.>. -M Xi xı“a S3 <U -H «3 İP > H3 V-S « fO2.Î.4 INSURANCE FOUNDATION In developped Finance markets the resources of the insurance Foundations which we may consider 25 being Financial intermedia ries out of the banko are formed onf insurance policies for persons and for things and curtailments of pension and their placements are formed of share bills and of bonds. Insurance policies execute the Function of wealth accumu lation (the protection of the value) which is exclusively one of the three functions of the money. People request insurance policies exclusively for the said reason and neither for the function of exchanging nore 25 a criterion of value. This property separates the insurance corporations from the particularities of Banking System (9) Main kinds of this corporations are: »Life insurance corporations -Estate and accident insurance corporations -Pension funds 2.1. S FINANCE COMPANIES These are mediator corporation providing funds to consumers who request directtly a credit in cash or to exploitations in general for the financement of enduring consumer goods, in form of credits with short or with long term. These have become specialist within the contect of the following three groups : 1 )Hire purchase. 2)Credit sale 3) Leasing And we may show those as: DBuoiness Finance Comoanies_g_ 2.1.6 INVESTMENT COMPANIES These companies provide funds by issuing share certificates. Following those step they make use of the said funds in order to constitute a porte-feuille of share certificate whinh they diversify for obtaining much more revenue. Additionally.the investment companies provide for the owners of small fundn. porte-feuille differonciation and management consultancy services. The investment companies can be examined in two groups : (12) 1 -Open-end Investment Companies 2-Closed end Investment Companies 2.1.7 DEVELOPMENTS BANKS These provide funds of long or medium term for economic development project accepts bles for the bank as well as provide various services for projects. They try to achieve 2 different functions: Financement and development. 2.1.8 REAL ESTATE INVESTMENT TRUST OR PROPERTY These are corporations which provide for the owners of savings the opportunity to take profit from rent and value increases by selling to them the certificates of participation of of the porte-feuille which was been formed by purchasing immovables. This king of certificates are also sold in secondary markets. 2.1.9 VENTURE CAPITAL These are corporations providing a new kind of instrtiment to capital market and in long and middle term, developping both the small and the mear companies. In state of providing credit or purchases of real estate and machinery an it is achieved in traditional banking in futur.the financement of ideas which may provide potential benefice is expected. The resources of inactive fund's owners are gethered by the company of ”venture capital“ and certificates of participation arc handed over in exchange.-10- The company of ”venture capital“ gives the said funds to attractive ideas and affa. i ro, oven provides management support. Against thio.it taken the partnership ohren from the exploitation». The partnership shares of the companion of thin kind and the certificates of participation issued by the company of ”Venturo“Capital,can be sold on secondary market. Amangst the corporation of thin kind which rather provide funds with very long term,, the venture capital (rink napitalHs important for Turkey. On these days, con joncture, whore a deficiency of investment in felt in private sone in Turkey, the institutionalization of venture capital via the support and the encouragement of the State, will be a first step to fill up the cavity existing at thin field. The Corporation of Venture Capital which provider! financrmrnt with long term. without interest is undoubtedly a privilege and in very important for Turkey. CHAPTER IÎÎ FACTORING AMD FINANCIAL ENVIRONMENT 3. 1. DESCRIPTION Factoring in a financial activity which in based on the purchase of the rigto of receivable arising from the sales on account in large quantites,by the financial institutions denominated an factor or factoring (t). The main fonctionn of these institutions are listed here below : l.The collection and the management of the roceiablen. 2. A warranty of collection of 100% 3. Payment in adance before the appointed term. 3.?-. THE MECHANISE OF THE FACTORING OPERATION The factoring Operation beings upon the presentation of the proposal of agreement achieved by the deotor near the customer, to the company of Factoring (to Factor) by the customer. After this, the company of factoring inventi gates the credibility of the debtor of his customer and in reoult of thin investigation, states for him a credit limit for prohable tranforn of receivables.?11 The company of Factoring notifies to hin customer that it in ready to pay in advance the equivalent of the receivables within the limit fixed for the debtor in written and in form of a responsibility undertaking. Upon this, the nuntomer conclude?) an agreement with the debtor. The Factoring company may cancel his rer.ponslbil.ity undertaking up to the date of delivery of the good related with the agreement by the customer to the debtor. Upon the delivery of the good by the cuotomer to the debtor. Upon the delivery of the good by the customer to the debtor, the customer transfers? his right of receivable related with deli very, to the company of factoring and also, presents a copy o the invoice. The factoring company records the amont stated with the invoice to the account of the customer, in order to determine the decided amount of saving (expenses, interests, fees. )In his way, the customer can imediately make use of the amount recorded an receivable on his account, in cash. 3.3 MAIN KINDS OF THE FACTORING OPERATION There are many kinds of factoring operation. But it in possible together the main kinds in four groupn(7) İ.REAL FACTORING : Discrimination of unreal factoring 2.INLANDCNATÎ0NAL) FACTORING : Discrimination of international factoring 3. FACTORING WITH PRE-PAYMENT: Discrimination of factoring without pre-paymont 4. OPEN FACTORING : Discrimination of came of lagcd factoring In the way to overcome the economic disturbances which prevail in Turkey, the main goal of the economic model based on free market economy and applicated since 1980 is the bringing down of the inelation and this fact put down two main nolicieo.-12.- Ono of those is the policy of severe control of money and the other in the increasing of the exportation in order to regulate thr equilibrium of payments. The increasing of the exportation is only possible via active workings, from the increasing of the topic of f inducement, of which the importance for the increasing of the exportation.is incontes table, the increasing of the resources and the application of financial technics which are widely used in international field, in Turkey are very important. Banks which were the unique resource to provide the necessities of financement of the firms, henceforth are loosing this property. For this reason new methods of fundprovision which bring in existance an alternative against the banks are more and more used widely in our country.Taking into account the conditions of our country, factoring which is easily available for the exploitations can satisfy a great necessity. Taking into account the conditions to be taken into consi deration by the exploitations while securing funds (facility of resource securing, coot, effect, on financial state, concordance with general policies of exploitations and variance according to the necessity of fund).factoring in one of the most suitable securing methods for the firms. Especially.desired by the firms with small and medium scale which are in their period of development and feel oontinously the necessity for fvmds and which are incapable to provide the securities requested by the banks, factoring is rapidly spreading in our country. While banks are mire end more few estimated in regard of their impositions when providing credits, the chance of the factoring which provides a large freedom of activity to the exploitations is more and more increasing. In Turkey, being in working order by know-how factoring is firstly applied by İktisat Bankası (Bank of Economy) in 1988. The first firm of factoring established in Turkey, is FACTO Finance A. Ç>. Facto Finance which has been established by İktisat Bankant commanced its factoring operatitns in relation with exportation operations.13- Memhcrs of the factoring Union i?2) Member company Paid-in capital TABLE I As the number of the factoring companies achieving the duty of of the vanguard and most of these being established via bank capital, is increasing from day to day, and the related legal frame not being arranged as it must to be, the factoring firms acting seriously have been oriented to form an union. The union has? been active in April 1994 and actually has \?. member?..The objectives of the union are to raine the factoring operations realized in Turkey, up to the level of the international standartsjto apply the factoring operations in Turkey, using the international, basic factoring acceptance and application procedures; to organise the activities in conformitiy with national and international regulations and professional ethics and the continue to act within the frame of the legislation in force. Factoring which became acquainted with Tıırkish Finance Sector in 1988, has shown a great development during the last four years and by the end of the year 199?., achieved a turnover of the 4.8 trillion TL. From the year 1988 in which the first company was been established, in time the number of the factoring companies has reach to 45 an by the end of the last year. To reach to achieve a turnover of 5 trillion within only a short period of time of four years prooves that factoring has commenced to take place in markets, as being a genuine instrument. Tn fact, by the end of the year 1992, this figure represents the 3% of the total credit volume of the banking sector. We may also express that this development draws an extraordinary rising graphing in abroad factoring services.14- Turnovrr of Factoring in Turkey. as per yrarn Total turnover M.illiard/% Table fl Turkey's plane in World' List, For Factoring operations Million $ Table III Developments and problems related with Factoring and Futur Option technics have been examined. 3.5.ContribnHorMi of Factoring operations? to national economy Here. We may mention in brief the contributions of the international factoring to national economy: -Due to factoring, Turkish exporters will securely have access to new markets and to new costumern and by the way will contribute to the increasing of the exportation of our country (3.1 ) -In cane where the purchasers from abroad would be affected with difficulties of payment. exportation values will be paid to correspondent factoring companies. Thus, as the consequence of the collection of the 100% of the exportation values, a loss of currency will not be in question for the country. -The pre-payment to be achieved by the factoring company located at the country of the purchaser will provide money entrance in cash without waiting the term to exporters and the national economy will earn most earlier the currencies from the exportations. -In the scope of factoring for the importation. while the exportations achieved by Turkish exporters via L/C would reach the limits of the country near correspondent banks, thanks to factoring which provides the same opportunities as the banks, this banks' limits will be available for the financoment of the projects of medium and long term.-15- CHAPTER IV PORFATTING ACT) FTMAMCrAÎ. KNVTRONMKNT Forfaiting is the purchase of the receivable to be collected in an ulterior date, arising.in general from good and ncrviva deliveries related with exportation procedures, without having the right, to return to anyone of their former holders and by applying a certain rate of discount. The term forfaiting i.3 defined an the definitive r.ale of the receivables with medium term in general or recorded and which are subject to a bank guarantee. an the renult of exportation, procedures. In brief.forfaiting can also be defined a financement method for exportation, with fixed rate of interest and of irrevocability character (3) In general, to forfaiting is a method financement, related with investment goods and in of medium term. While some forfaiting operations take a short period of time an 5-6 months, some others maytake a long period, as 6-7 years. Forfaiting in used with two goalln.Tho first is to solve a financial opportunity in long term (for example the renewing of a machinery parking )and the other in to help to the canh flow of the exporter, providing a credit opportunity to a purchaser from an overneas country (4) A.?. The Menhaninm of Forfeiting operation Tn forfaiting, the value of the good of investment to be imported from abroad in extended on the economic life of the good in question and in paid by instalments. Within thin frame, a commercial agreement in concluded between the exporter and the importer firms and the price and the payment plan are fixed. After thin, the importer firm take delivery of the goods and in exchange, following the provision of the bank guarantee, transmits the bills of debt to exporter, through his bank. In the following step, in order to transform his receivables into money in cash, the exporter concludes on agreement with a forfaiter.on the banes of a certain rate of discount. The transmission of the documents related with the receivables, by the exporter to the forfaiter and in exchange of this, following the application of the required discounts, the whole renponsabilities related with the negotiation and the procedure in quention are finished.-16- în the further stage, the forfaiter my trannm.it the instruments of payment to guarantor hank in order to causo their collection at the and of the term or may transfer those to third persons (9) 4.3 FORFATTI.NG AND T TO DF.VF.Î.OPMERÎT JN TURKEY The dcvoloppmontn which have oooured after the year 1980 in Turkish economy and forfaiting, which in a procedure of external commerce, developped an an alternative to traditional hanking opera tionn, in applied only in a few recent past years. But for all, its part in our finance oector can he considered as being innreaned. The forfaiting operation.*-, provides advantages and facilities» hoth to importer and to exporter and for the mentioned reason it has hocame a preferahle procedure of financement in our country. Although not being frequently used in our country, the forfaiting procedure exposes its two aspects. The first of thesp which can also be qualified as inland factoring, can be defined an the undertaking of the risks which may occure from the credited exportation?! of Turkish exporters by the forfaiter and presently the total payment of the exportation 'price. The abroad forfaiting market where the bills and policies drawn up to the order are sold in order to cause the payment of the amounts of importation on behalf of Turkish importers who import goods with a term constitutes a nubjeot to other kinds of procedure. Tnland Factoring application in actually performed by some Turkish banks and by foreign banks that are active in Turkey. The forfaiting which day to day achieve importance accordingly with the increasing request of goodn of investment of the devel.opping countries in a procedure which provides financement to exportation. Which in very interesting is that the porcedure in question applied in an export operation is profitable regains an alternative possibility of financement in state of the cradit guarantee and avoiding both the customer risk and the fluctuations of the rates of exchange, provide money in cash via minimum formality. While the exporter whose the bills are accepted by the forfaiter obtains the chance of credited purchase, the corporation providing the forfaiting is also strenghtenings its situation.-17- Because, under normal conditions, a forfeiting bill, in covered by the guarantee of the bank of the exporter and this kind of commercial debts are in general excluded from the frame of debt adjournments <31)Within the frame of the economic policies which were been applied in our country ninra 1980 with the basic goal of to show off and to be integrated with world 's economic system, the increasing of the exportation has a critical scale. In relation with this fact. and in regard of the continuation o the increasing of exportation, together with the increasing of production, the financement of the exportation has regained a big importance. Appreciated within thin context like factoring it in very clear and evident that the forfaiting will increane the possibilities of financement and will support the development of the exportation by achieving a contribution to develop the porcedure of credited sale. The potential, in importation will be devolopped by reason of incrcaning in industrial poroduction and consequently in the investment of the exportation in case of roalisaiton of a tansformation, in favour of semi-capital goods. Naturally, the exportation in thin field har? to be oriented to reliable markets with low rink of cotintry. In regard of the actual conditions and those of the near future, in order to encourage new financement technics, while for ”factoring“ an union wan benn formed, in state of the establishment of inntituionilar.ation for forfaiting.rathcn it will be useful! to form the required staff within the frame of the banks and to make known the new technics. CHAPTER V Î.EAKIMG AWT) THE FINANCIAL ENVTROW1EHT B.l.DEFTNATIOfJ Leasing is an agreement concluded between the lessor and the lessee, for the rent of a certain duration, stating that during the said period, the property of the good will pertain to lessee under the condition of the payment of a certain rent by the lessee. In our country the definitaion of leasing stated by the law of Financial Lease numbered 3226 is given an here above.18 in general and frequently.leasing is a financial procedure with a long term. uoed for the financcmont of the investments. Financial lease makes possible in its general form, the lease of all kind of gooda.Good group which stro subject to leasing in abroad are stated here below: 1-A11. kind of machinery and equipment 2-Means of trannport terrestrial, aerial and maritime. 3-Immovablo centrales, building and lands. S.2 The mcohaninm of leaning The mechanism of leaning can be summarised an follows; The lessee finds and chooses the good and concludes a sale contract with the vendor firm which is the owner of the good in question. After this, in order to take delivery of the choooen good, he makes recourse to a leasing firm, in order to secure the required financement. The leasing company taking into consideration the financial structure and the cash flow of the firm, as well as the characteristics of the good of investment, presents an indicative offer to the firm. After this, a ”Financial Lease Agreement“ of a least of 4 years and certified by the Notary Public, between the leasing Company and the Lessee Firm. When judged necessary the Leasing Company reserves the right of requesting a ”Security“ from the Lessee Firm.Tn case where the investment is of encouraged nature, following the signing of the financial Lease Agreement, together with the Leasing Company the Lessee Firm makes recourse to the undersecretary of the Organisation of Plannifioation of the State (DPT)and achieves the transfer of the certificate of encouragement. The Leasing Company achieves the payment near the Vendor Firm, then realizes the cover of the good by an insurance and cases the deliverv of the sood bv the Lessee Firm.-19 At the exportation date of Agreement the Lessee Firm may be the proprietor of the lesed good, by paying a symbolic amount fixed in advance with the terms of the Agreement or if required, the good can be given back and the term of the Agreement may be extended with rent amounts relativemy lessor. 5.3 KINDS OF LEASING Having a number of field of application in occidental countries, leasing was difersified in many forms. Here below,! want to summarise some more widespread models. (4) 5.4 NATIONAL l.BASING-lttTERNATIONAl. LEASING This is a discrimination encountered in the application in the USA. Leaning of national, nature (Domestic Leasing) covers motor vehicles and consumer goods. ”International Leasing“ consist on the delivery of the goods such as planes, tank ships and PC systems, to the cxplotation in Foreign countries. 5.4.2 OPERATING LEASING-FINANCIAL LEASING The ”Operating Leasing“ covers the consumer goods and is of short term. The ”Financial Leaaing“covera the goods of investment. 5.4.3 DIRECT LEASING-INDIRECT LEASING This discrimination is encountered on Territorial Europe. In ”Direct Leasing“,the manufacturer or the vendor rea.lir.es personally the leasing,this is also be denominated as ”Manufacturer“or ”Vendor“I.easing. In ”Indirect Leaning“, a Leasing Company takes delivery of the good of leasing is also be denominated as ”Leasing of Financement“. 5.5 UTILITIES OF LEASING Utilities of Leasing are pretty numerous, and for this reason, its field of application is very large in developped countries. I want to talk about some most important utilities of leasing here below.-20- a) Taken into consideration within the macro plan loaning has an effect of creation of request. Firms with insufficient purchase power.. thanks to leasing can find the possibility to use the goods of investment. For this reason, leaning han an effect on the extension of the national economy.Even, loaoing is a system capable of resource creation (3) b)Banks, request a high rate of security from the corporations wiahing to realise their investments via bank credits. But in leasing, an the property is continuing to pertain to lessor, the raliaation of the investments against relativity reduced securities is alwaysponsiblo. Already.leasing is considered as an alternative to medium term bank credits. c)As the lessor Firm declares the rents an its expenses, lessing is more profitable in regard of taxation. (6) d)It makes posnible for the corporations, to fomiliarise with modern technologic developments. Novelties, in technology reflect on the Lessee Firm via Leasing. By the way, Leasing is very important for technology transfer. 5.6 THE IMPORTANCE OF THE FINANCIAL AMD ECONOMICAL LEASING FOR TURKEY The importance and the rapid development of circulation of the Financial Lease System which have been introduced into the economic context in 1986, in Turkey are due to the deficiency of sufficient and regular medium term credit availabilities. Furthermore, the financial system not being available for the provision of the funds required by exploitations, the orientation through new financial technics has been accelerated within the context of fund researchs. In the years where the credit costs were very high and the banks, in regard of the risks that they have considering, were unwilling to satify the demands of medium term credits of the exploitations which continiously have suffering from deficiency of-21- financoment, it has thought that leasing would bo a propulsive force to satisfy the demands of fund of the investors and for the activation of the? investments and would be an attractive instrument, of financement for the efficient use of the resources. In our country, the number of the corporations capable of satisfying tc demands of financement for the investments is very restricted. The inflation rates being high and consequently the porvision of long term funds from money and capital markets being difficult. the banks are unwilling to satisfy the demands of financement for this kind of investments. Leasing companies are corporations capable of satisfying the demand in question and of providing long and medium term financements to said a separate one, this resources can easily be oriented through genuine investments an also can easily be controlled. In leasing the good of investment required by the investor is purchased by the leasing company and is rented as a good to Lessee. In this case, the control of the investment do not cause any problem. In financial Leasing, if the payment plan of rent is thought as being fixed, the negative, effect of the inflation would not effect the investor. But the value increasing of the fixed asset due to inflation being profitable for the financial leasing company the purchase by the Lessee Firm becomes more favourable for this last one. In our country.financial leasing companies add the estimated rate of inflation to the value of the good, when achieving the evaluation (29) Nowadays, the conditions of Turkish economy sro unfavourable for investments of big scale. Inflation rate and also the scrap value of the immovables and the other goods of investments being too high, the leasing alternative looses it's attracti vity. The importance of lease for Turkey is increased, because the domestic saving is not powerfull enough to support the investments and consequently fund requirements of the explotationo can not be satisfied. In addition, to the insuffisence of the funds, the high interest levels impose their negative effects on the investments. In an environment like this, the financial leasing will inject a certain vitality to our economy.22.One of the topics moot important for Turkey is the efficient role of the leasing for the achievement of the canalisation of certain funds, through our country. Within this frame it is thought that the leasing syotem would be noefu.ll for making use of the fundn of the Islamic countries. In said countries., the concept of interest being replaced by the concept of profit, the leasing system will accelerate the fund transfers and the entries of goods of investment through Turkey. Up to day. finds provided by Islamic Progress Bank via leasing through some corporations are existing. It is possible to make use of these funds in a manner most profitable. Furthermore it is undoubtful! the private finance corporations that the business area comprises also the financial leasing would play s more efficient role on this field (31) Considering the actual application of leasing, via can be seen that it is a few far from investments and flows through areas related with consuming. If leasing would be used in investments and enterprises achieved by the official (state) sector for public interest, it would be a concurrent instrument of financement against the banks and the other financial corporations. As the official institutions do not provide sufficient securities, leasing companies are unwilling to achieve thin kind of activities, (even judged as being risk'y by the banks). Exclusively, in case where the corporations providing resources to official institutions would accord a (-s-)limit for the operations of investment, the money to be spent would be transformed in real investments and leasing would so regain its own field and its functions in national and international fiels of application, thus it would take its own place amongst other finance corporations.-23- CHAPTBR VI PRIVATE FINANCE CORPORATIONS! AMD THE FINANCIAL ENVIRONMENT A. 1 Objectives of the corporation”exiatig in our country In 1983. nur country regained o new kind nf financornont corporation, which was not defined a? a bank. in spite of being sujbioot to a bank statute. The denomination of this new kind of financemont corporation formed upon the decision of the Bank Counccl.is“Private Finance Corporation”. This corporation acts? in accordance with Islami. c religious regulations. The main ohietivos for the establishment of the Private Finance Corporations can be explained as fol Town: -To take profit from the foreign capital to be imported by the corporations applying the banking without interest which is particularly expended on the Islamic world. -To attract and to evaluate the savings of the people who are not depositing their savings to banks boleiving that the interest is canonically prohibited. To build up most close relations with arahio. countries and to take profit from arabie capital. (2) In 1985, Al Baraka A. S and Faisal Finans Kurumu have been established. Kuvey t Türk A.Ş has been established in Î989 on finally Anadolu Finans Kurumu A.Ş has been established at the nde of the year 191. The main part of the capital of the first three corporations is of foreign source, the capital of the third corporation io totally of inland source. By the end öf the year 1992, for f.ifith corporation any attempt is not foreseen. Savings with term or without term gathered in banking system, are denominated as deposits. The serviceability of the deposits is rea.1ir.ed as credit. In private Finance Corporations, the savings without term are gathered in“current accounts”and the savings with term are «gathered in“accounts of contribution”. The funds so collected are provided for third persons and firms via“contract of Parficioation to Profit and to loss”“.24 6. 2. The Sources of The Private Finance Corporations and Their Use 6. 2. i. Private Current Accounts These corporations can collect funds under title of current account. The Central Bank of the Republic of Turkey has limited the level of maximum funds' quantities acceptables to their current accounts, with a ratio of 10 times of their own sources. Current accounts are showing many common characteristics with the deposit accounts without term of the banks. From the funds accumulated on current accounts ; compulsorily, at least the 10% has to be retained in cash or to be deposit near commercial banks and the other part of 10% has to be invested to liquid movable values to be determined by The Central Bank of The Republic of Turkey or has to be deposited near the same. It can be seen that the 20% of the funds accumulated on current accounts, unless being modified by The Central Bank of The Republic of Turkey, can be judged as being ”blocked“. By this way, after the seperation of a part of 20% as a disponible value or as a reserve, the remaining part of 80%, in accordance with the field of use is divided into two. The first portion of 50% of the remaining or in other words the 4o% of the funds of current account, taking into account the supposition for the continuty of a certain part of the funds, can be service able to physic or moral third persons as credit with long term.The remaining part or the 40% of the funds of account can be invested for the financement of commercial activities, with a maximum term of 12 months. 6. 2. 2. Accounts of Contribution For the use of the funds accumulated on the accounts of contribution, certain conditions, formalities and restrictions have been foreseen in accordance with the dispositions stated by the notice related with the decision contained in the decree numbered 83/7506 related with the establishment of The Private Finance Corporations issued by The prime Ministry 'Under Secretary of Treasury and External Commerce. According to Islamic Faith, the revenue is in fact rests on tha basis of the labour and the most convenient and profitable use of the others factors of production. Within the frame of the principles of Islam, the use of the capital together fith the other factors of production as labour, technology, earth and management is not prohibited.-25- As the case was in yesterday, actually the power of gaining accumulation of the capital, to the other factors of production is continuing. This capital has to be oriented through the investments and the commercial activities. By preventing the commerce of money, it is tried to restrict the artificial expansion of the economy and to avoid the accumulation of the sources, an the hands of some individuals. In consequence it is tried to provent the artificial increasing of the costs. By fixing the prices of the certain levels, both manufacturers and consumers are protected against the inflation. Regardless the technics of making use of financement,the main objective of The Private Finance corporations is to contribute to production and to exerce commercial activities with benefit levels of the current market and always with a profitability level under the costs of the current credits. The Private Finance Corporations provide to their costumers and firms 8 kind of services, i.e. Mnudaraba (Profit/Loss sharing),Muşaraka, Murabaha (Support to production or sale with term), purchase and sale of the certificates as counter value of goods, Leasing, Lease-Purchase, Purchase of share and Lending (Kars-i Hasen). 6. 3. The Private Finance Corporations and General Evaluation The economic policy which is in force since 1980 in Turkey attachs a big importance to high interest rates and to financement of the investments by real sources. Thus, it has been though that the formation of source would be more easy. But the positive interest policy, with the effect of the inflation which continues in spite of the stated precautions, has gave rise to a rapid increasing of financement costs as well as to an increasing of the demands of short term credits of the exploitations. The internal saving not being raised to its sufficient level, the vivification of the investments could not be realized. For this reason the importance of the foreign capital and that of the foreign credits as source, have been increased day to day (7).-26- Within this period, in regard of our good relations with the middle-east countries and the other Islamio Countries and providing from this countries new sources £or our economy and in order to collect and to transfer to the order of the econoray the inactive funda which do not flow through the classio banks the owners of the savings then by this way to provide an increase of revenue,the events have leaded to the realization of the private îinance corporations which would act within the frame of Islamic banking principl@s,in order to aotive Turkish economy and to realize a progress. With their yielding methode of fund eollection and their form of financement based on commerce, ths private financ© corporation undertake a certain function to decrease the rates of interest in contrarity with th© banks. This result to the expansion of the volume of investments and then to increase the value of the goods and services and to the exp«.neion of the national revenue. The private finance corporations submitted to VAT obligations and in relation with their eomtnercial activities drawning up commercial invoices have a positive structure by reason of the avoidin® of tax evasione. Furthermore,in regard of the partnerehip for participation to profit and loss established between the corporation and its custoıner, the investigation of the corporation via efficient market studies,the acceleration of fund flows through the sources o£ placement the increasing of th© revenues of the corporation have together to be indicated within the frame of the contributions of the private finance corporations to national Econoray. The main difference existing between the banking system without interest and the cassic banking system can be st«ted as follows: Ciassic banks gather the deposits and give to their clients, the interest prevîouely determined then sal© the deposits to persons ör to firma and receive th© interest.-27- While making use of the deposits,they are not interested with the aim of th© use and the field of the investment,they only try to make the necessary precautions in order to ensure the return back of th© funds and also try to reduce the rate of risk to zero»by receiving guarantees. in banking systera without interest, the funds are gathered frotn the owners and an agreement of ”participation to loss/profit is concluded between th© parties. Funds acumraulated via said agreement are caused to be used to firms through the related corporations. While causing to make use the funds they «et as do the merchants.They participate to ainıs of use of the funds and to fields of investment,together with the explotations,in other words,they ahare the risk together with them. Nowadays,considering the methods of causing to make use the funds of the private finance Corporations we can easily understand that they attach importance,mainly to work via support of the production (murabahaKBecause with this procedure the risk is reduced to a minimum level and with the negotiation achieved of the beginning, the responsability and the risk of making use of the funds are finishing. But despite this, in case where the investigation would not be efficient ör where the field ofactivity would be dangerous,the possibility of risk ever exists.With the methods of murabaha and muş ar aka, the possibility of risk is more important.The fields of investment and the supported projeets have to be studied very carefully.Because,in case of the loss of the participation, corporations would be affected more seriously. For this reason,when investing,corporation make attention to the profitability and make ör make made a very spesific market research,in order to minimize the possibility of risk. The functions achieved by the private finance corporations demonstrate that they were very successfull and performed an homogenous rising trend in Turkey.Despite, these,some irregularities and some deficiences exist on the mechanism of the system.These has to be avoided and to be correeted.In contrary case the accelerated trend achieved within the last eiht years my stop and the system may be blocked.-28- Banking without interest, just the case is the same for the other Islamic countrles, could not achieve a total compalibility in regard of its structure, its functions and its relations with the other financs institutions.în other word,it is already at the beginnig of the road.This system needs s time both in theoy and application.lt is possible to exprime that it has positive conributions to Turkish econonıy and to the sector of Finance. în our country,a radical legislaitve arrangement prepared for th© deterraination of the working conditions and the prineiples of the Private Fînance Corporations has to be drawn up und for the efficient functioning of the Private Finance Corporations and of the other finance institutions existing in our financial market. At last, Private Finance Corporations are candidate to represent öne of the most colourfull elements existing on the financial market, in general, Private Finance Corporations are orineted through commercial activities with a lîttle level of risk and do not transfer funds to the fields whîch are out of their control.
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