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The potential for sustainable growth in motor vehicle and
general purpose loans
According to figures published by TurkStat, the Turkish
Statistical Institute, there has been a 61.9% increase in the
number of motor vehicles licensed to travel on Turkey’s roads
in the most recent ten-year period. As of end-2016, there were
142 motor vehicles for every 1,000 people. These numbers tell
us that motor vehicle ownership is continuing to increase at a
high rate and that there exists significant untapped potential in
the business of motor vehicle financing.
Again as of end-2016, the aggregate value of the motor vehicle
loans held by financing companies amounted to TL 25 billion.
Of the new loans that were extended last year, fully 86.5%
were to finance purchases of motor vehicles by individual and
corporate borrowers.
At a time when fast, one-stop service is gaining
importance…
Because they can use the internet and mobile apps to look for
the car they want to buy and to shop around comparing price
and equipment options, prospective buyers nowadays no longer
visit showrooms as much as they used to. The same technology
also makes it possible for them to check out their own credit
scores. It is essential therefore for financing companies to
proactively adapt themselves to deal with these technology-
adept buyers by keeping a close watch on new developments,
innovations, and trends, by employing innovative products, and
by maximizing their own use of technology.
Just as is the case elsewhere in the world, today the financing
companies which represent 52% of the Turkish finance
industry’s motor vehicle loans are undertaking investments
that will allow them to provide business-to-business (B2B) and
business-to-customer (B2C) solutions that are compatible with
their business partners’ needs while also developing mobile and
online apps that respond to customers’ wishes. In effect they
are creating platforms that make it possible for a customer
to take care of every aspect of a car purchase from financing
to insurance, vehicle registration, and guarantee extension
in a one-stop operation without a necessity for leaving the
showroom for any other operation.
Many domestic and international investors are taking an
interest in Turkey’s finance industry.
Besides new investors entering the market, there are also
companies that have joined or are in the process of joining the
Turkish finance industry as firms that provide point-of-sale
service in many different areas such as brown goods, white
goods, furniture, education services, telecommunications, and
logistics. Driven in part by new players entering the market with
so-called “microloans”, financing companies witnessed a huge
298% surge in the number of their customers, which reached
2.4 million people in 2016. Credit products that are offered
in line with responsible lending principles are an important
advance from the standpoint of safeguarding the interests of
both consumers and vendors.
Last year two companies that abide by sharia-compliant
lending principles applied for financing company licenses in
2016. These are just the first newcomers of this sort to make an
appearance and it is thought that there will be many more of
them joining the market in the period ahead.
We are focused on the future in line with Turkey’s 2023
Vision.
Working together with other sectors of AFI as well as with
the Banking Regulation and Supervision Agency and all
other regulatory bodies, in line with Turkey’s 2023 Vision, our
Association will continue its efforts to make our country’s
finance industry and its practices a model to be followed by
others around the world.
Sincerely,
Mehmet Cantekin
Chairman
(on behalf of Financing Companies Sector Representatives Board)
52%
share in the motor vehicle loan market
With a 52% share of market in motor vehicle
loans, financing companies keep a close watch on
worldwide practices and trends.
Huge surge
in the number of customers
Financing companies witnessed a huge 298% surge
in the number of their customers, which reached 2.4
million in 2016.
The Association of Financial Institutions
Annual Report 2016
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