Turkey Country Report 2018

  |   Insights and publications

Onur Aksu, director of Integra, our Turkish partner, shares with us his expertise on the market, where despite economical and political challenges, there is an observed revitalization in the credit insurance market after 2 years of recession.


Macro-economical environment in Turkey

Population :

79,5 million

Unemployment rate :

Despite the increase in the labor force, the unemployment rate remains high at above 10%. Strong GDP growth in 2017 (and before) has not created enough employment opportunities


Top commercial activities:


  • Agrifood
  • Iron and Steel
  • Construction
  • Electronics
  • Textiles
  • Automotive



GDP Growth and Financing of Private Sector


  • Strong public spending and public investment, as well as rebounding exports spur the economy
  • Consumer spending is decreasing from +5.4% in 2015 to +3.7% in 2016 and +3.4% y/y in H1
  • Fixed investment growth slowed down from +9.3% in 2015 to +2.2% in 2016 and +3.0% y/y in Q1 2017, before rebounding to +9.5% y/y in

Credit Guarantee Fund & Fiscal Policy


  • While keeping the official policy rate unchanged at 8%, the Central Bank has funded the market mostly with 12,25% lending rate.
    Government launched a new funding mechanism, Credit Guarantee Fund, supported by the treasury.
  • More than 350,000 firms used KGF
  • More than 200 Billion TRY credit utilization
  • Banks expect probability of default on credits (KGF) at 5% – 10%


Depreciation of Turkish Lira


  • 40% loss of value against the USD to date
  • It affected corporates indebted in FX.
  • It is expecting continued volatility and a -10% depreciation in 2018, due to growth slowdown, large current account deficit and ongoing dollarization


DSO Outlook


  • In 2016 companies paid on average 16 days later than the global average
  • Turkey DSO : 80
  • Global DSO : 64
  • DSO of construction, high-tech, paper pharma and machinery are more than 3 months



Credit Insurance Overview

Main players and premium volume:

Coface (25M€), Euler Hermes (20M€), Atradius (12M€)


Risk and Commercial appetite:

There is a revitalization in credit insurance market after 2 years of recession. Claim ratio has dropped to 30% in general and limit exposure is increasing.


Credit insurance / bonding market:

We expect that credit insurance market will continue to grow next year in double digits. After the regulation modification in public procurement law, public companies started to accept bonds of insurance companies. Local and global insurance companies which are active in bonding already started to propect the bond market in Turkey.


Loss ratio evaluation:


Below, you may find loss ratio figures of insurance companies :

  • Atradius

  • Euler Hermes

  • Coface


Company Name

Loss Ratio 2015 Loss Ratio 2016 Loss Ratio 2017 (as of Oct.)
Atradius 322% 342% 17%
Coface 83% 60% 41%
Euler Hermes 333% 161% 25%


Laws related:

TTK (Turkish Trade Law) regulates terms of payments. There is no any restriction on payment terms. Postdated checks are also defined in TTK.


Distribution and available products:

Whole turnover, outstanding, single risk, single / multiple buyer, bonding.



Payment practices



Atradius made a survey regarding to payment practices in Turkey and results of this survey is interesting. Compared to one year ago (57.1%), the percentage of overdue B2B invoices decreased slightly in 2017 (55.9%).

  • 89.3% of respondents in Turkey reported having experienced late payments from their B2B customers over the past
  • On average, 55.9% of domestic and foreign B2B invoices remained unpaid at the due date.
  • Domestic B2B customers of respondents in Turkey were asked to settle their invoices, on average, within 55 days after the invoice date.
  • Foreign B2B customers of respondents in Turkey were asked to settle their invoices within 39 days, on average.

Even with the longest average payment terms in the region, domestic B2B customers of respondents in Turkey delayed payments, on average by 40 days. In contrast, foreign B2B customers delayed their payments by an average of 34 days.


Key Factors:


The main payment delay factor by domestic B2B customers remains liquidity constraints and inefficiencies of the banking system.


  • Insufficient availability of funds
  • Intentional use of outstanding invoices as a form of financing
  • Formal insolvency of the buyer
  • Inefficiencies of the banking system
  • Complexity of payment procedures


The main reasons of insolvencies are:


  • bankruptcy
  • failure of collection attempts
  • the old age of the debt




Turkey has the highest percentage (2,2%) of the total value of B2B receivables written off as uncollectable

  • The proportion of uncollectable B2B receivables in Turkey remained stable compared to last year (2.2%).
  • Uncollectable receivables in Turkey consisted almost entirely of domestic write-offs (domestic: 1.8%; foreign: 4%).

In 2017, the largest proportion of uncollectable receivables came from the construction, consumer durables, textiles and services sectors.