Halic Leasing widens Turkey's Islamic finance market
Feb 8 (Reuters) - Istanbul-based Halic Leasing is expanding
its sharia-compliant business portfolio to tap demand from small businesses,
the latest sign that Turkey’s Islamic finance market is growing beyond
traditional banking services.
Turkey is the world’s 17th largest economy with a predominantly
Muslim population of 76 million. Promoting Islamic finance is a part of
government plans to boost commercial ties with the Gulf and diversify the
country’s investor base.
Halic is building a portfolio of leased assets and is targeting
new business of around $25 million by the end of the year, said General Manager
Gokcen Sahin.
The firm also aims to attract further investments from Islamic
mutual funds while expanding into construction equipment later this year, a
sector which comprises around a quarter of Turkey’s leasing market, she added.
The plans come after the firm’s new shareholders injected fresh
capital at the end of last year and set up a sharia committee to ensure its
products follow religious principles such as bans on gambling, tobacco and
alcohol.
“Some of our customers are very sensitive in this area - they
want to be sure that our products and our funding resources conform to Islamic
principles.”
Halic was established in 2004 by Kuwaiti investors but took new
shareholders in October: Turkey’s Aktif Bank, the Saudi-based Islamic
Corporation for the Development of the Private Sector (ICD) and Ijara
Management Company.
Islamic finance in Turkey has been predominantly driven by
domestic Islamic banks, known locally as participation banks, but
sharia-compliant leasing could help tap into a large pool of SME businesses.
Most leasing transactions by Halic involve manufacturing
equipment used by Turkish firms that supply the automotive, food, packaging and
durable consumer goods sectors.
With a good quality portfolio, Halic may consider raising funds
via Islamic bonds (sukuk) in the future, she added.
Other Islamic finance efforts in Turkey have also picked up
pace over the past year, including a World Bank programme aimed at providing
long term Islamic financing for SMEs.
After a slow start in 2015, the programme had disbursed $147.9
million as of December from a total commitment of $250 million, according to a
World Bank report.
In
November, the ICD extended a $25 million medium-term Islamic financing to Calik
Enerji, the energy arm of conglomerate Calik Holding. (Reporting by Bernardo
Vizcaino; Editing by Kim Coghill)