Katılım Finans Kefalet AŞ Started Operations by Providing Its First Guarantee (AA)
KFK offers support through equity or Treasury resources to SMEs that cannot obtain the bank financing they need due to insufficient collateral.
ISTANBUL (AA) - Katılım Finans Kefalet (KFK) AŞ, established to provide small and medium-sized enterprises with access to financing within the framework of participation finance principles and to make such enterprises more competitive in their sectors, has started its operations by providing its first guarantee.
According to KFK's statement, efforts are being made worldwide to increase production capacities for economic growth and employment. While the financing needed to increase production was in the past provided only through conventional banks, institutions operating within the framework of participation finance principles are now also highly active.
In this context, participation finance institutions, which place moral and human values and risk sharing at their core, prioritize social justice, and create a sharing-oriented and positive social impact, have significant potential to contribute directly to economic growth.
As of 2023, 8 participation banks, 2 of which are digital, operate in the financial sector. The total asset share of participation banks in the banking sector is projected to reach 15% in 2025.
To support the achievement of the target set in the sector, to provide small and medium-sized enterprises with access to financing within the framework of participation finance principles and to make such enterprises more competitive in their sectors, KFK was established on 29 March with the approval of President Recep Tayyip Erdoğan, through the partnership of the Ministry of Treasury and Finance, the Participation Banks Association of Türkiye (TKBB) and 6 participation banks.
KFK offers support through equity or Treasury resources to SMEs that cannot obtain the bank financing they need due to insufficient collateral. In this way, SMEs can implement their projects and ensure sustainability by growing their businesses.
- KFK aims to announce new packages that will create a financing volume of TL 900 million
In compliance with interest-free banking principles and standards, KFK aims to provide support by issuing guarantees in favour of natural or legal persons in order to contribute to meeting all kinds of financing needs through financing guarantee and surety practices implemented in Türkiye and abroad, as well as newly developed ones suited to Türkiye's conditions.
Katılım Finans Kefalet will contribute to strengthening the participation ecosystem by meeting the sector's guarantee needs within its own structure. Businesses operating in accordance with participation principles will be able to meet their collateral needs from Katılım Finans Kefalet AŞ in the process of accessing financing.
As of July 2023, KFK signed a protocol with 6 participation banks and launched its first guarantee package, creating a financing volume of TL 300 million from its equity.
KFK aims to announce new packages that will create a financing volume of TL 900 million by the end of 2023.
As of August 2023, companies in need of financing began to receive support through participation banks with KFK guarantees of up to TL 10 million with a maximum maturity of 12 months.
KFK Board Member and Kuveyt Türk Deputy General Manager Abdurrahman Delipoyraz, KFK General Manager Ömer Karakuş and Deputy General Manager Zekeriya Altun visited the branch that received the first guarantee application and disbursed the financing, and presented plaques to the employees for their success and support.
With its cultural heritage, geopolitical location, economic size and hinterland, Istanbul meets many of the requirements to become an international participation finance center. With more than 40 years of participation finance experience, the Istanbul Finance Center is a candidate to become one of the key centers in the formation of the new financial architecture.
KFK will contribute to the growth of the participation finance ecosystem by supporting alternative finance areas such as 'socially responsible finance' and 'green finance', as well as projects such as financial technologies. In this process, the Istanbul Finance Center project and participation banks achieving their desired goals are seen as an opportunity.
Source: Anadolu Agency