2023 stood out as a period in which inflationary pressure was felt very intensely worldwide, and central banks therefore tried to combat this pressure using monetary policy tools such as interest rate hikes.

Facing a similar fight against inflation, the Turkish economy followed these monetary policy steps and made serious efforts to come through this difficult period with as little damage as possible. At the same time, as an election year, 2023 was a year in which economic actors and their messages were at the forefront. The focus was on measures such as interest rate increases, tight monetary policy and restrictions on credit conditions aimed at bringing inflation down. As a result, businesses at times had difficulty obtaining financing and putting in place the required collateral.

During this process, in which the Turkish economy was going through a challenging period, the participation finance ecosystem continued to contribute to production and employment by taking into account the needs of all businesses, and increased its market share in the sector. In addition, when it came to providing collateral, one of the most difficult areas in accessing finance, the participation finance ecosystem had in past years been obliged to rely on support from the conventional system, as there was no participation-based company. The decision of the TKBB (Participation Banks Association of Türkiye) advisory board to establish a new guarantee company operating in line with the principles of participation banking, together with the participation banks becoming partners in this initiative, became an important turning point for the establishment of Katılım Finans Kefalet.

With the approval of our President, Mr. Recep Tayyip Erdoğan, the support of former Minister of Treasury and Finance Assoc. Prof. Dr. Nurettin Nebati in accelerating the process, and the effective coordination of our Deputy Minister of Treasury and Finance Mr. Osman Çelik, who was then Chairman of the TKBB Board of Directors, and TKBB Secretary General Mr. İsmail Vural, the establishment of our company was completed extremely quickly and it was registered on 29 March 2023. I would once again like to sincerely thank everyone who contributed to the establishment process for their support.

Katılım Finans Kefalet has taken on a pioneering role in the participation finance ecosystem as the common value of the Participation Banks. I would particularly like to say that leading the first company in which all participation banks are shareholders has been an extremely proud experience for me personally. In addition, the direct shareholding of the Ministry of Treasury and Finance of the Republic of Türkiye has given the company considerable strength. This represents a first in the sector and is regarded as an important milestone.

Katılım Finans Kefalet has employed all the necessary human resources and, in the nine months since its establishment, has built its infrastructure by making the best use of the existing conditions. In this process, it began offering its first guarantee services in the fourth month after its establishment, using resources provided from its own equity. The first guarantee packages were designed specifically for, and offered to, exporters, investors and producers who contribute to the Turkish economy. In addition, the integration process with all relevant institutions and organisations has largely been completed.

2023 marked an important period in which our company was established and began to make rapid progress. For 2024, we set the goals of digitalising guarantee processes end to end and using artificial intelligence-supported decision systems in these processes. We have defined these as our company's core vision.

This year will be a period in which we truly gather pace. I would like to state that, as Katılım Finans Kefalet, in addition to filling the gap in the sector, we have made it one of our priority goals to help the Participation Finance Ecosystem reach the market share it deserves, and thereby to provide the best possible support to Türkiye's growing economy.

On this occasion, I would like to sincerely thank our Chairman and the Members of the Board, who have never withheld their support, as well as my valued colleagues and our stakeholders.

Yours sincerely,

Ömer KARAKUŞ
Board Member and General Manager