TBY talks to Sefer Altıoğlu, General Manager of Creditwest Factoring, on the growth and development of the factoring sector.
TBY The Turkish factoring sector began in the 1990s, playing a large role in helping save the financial sector at that time. What role would you say factoring plays in Turkey today?
SEFER ALTIOĞLU I believe the Turkish economy has a big capital deficit. Every big actor needs more working capital, and every company needs supplier credit, so there will be more potential for factoring, because factoring companies buy supplier receivables. Every entrepreneur needs supplier credit because our financial system is small and doesn’t have sufficient credit to give to entrepreneurs. As a result, entrepreneurs need supplier credit more than financial credit. An economy that is more in need of supplier credit also has a greater potential for factoring.
In what sectors of the economy are you most active in terms of providing supplier credit?
In our company in particular we are focused mostly on the construction and real estate sectors. This is natural considering these two sectors are booming in Turkey. We have the second biggest construction sector in the world, and the growing population and economy in Turkey means there’s always a need for new housing. Many young people used to live with their parents a decade ago, but these days young people move out and live on their own. Companies in these infrastructural fields always need as much credit as possible, and often don’t have enough money to pay immediately, or need a lengthy period to pay suppliers. That’s where we come in. We sign a notarized agreement whereby the suppliers give all their financial rights to the factoring company, which essentially buys their invoices, and a certain amount of it is paid to the suppliers as credit, so that the payments due to them from clients are paid to the factoring company instead.
Following double-digit growth since your company began, what is your forecast for continued growth?
We foresee 40% growth for 2011, although I believe we will surpass that because ours is a well-known, listed company. We have different financial resources than other factoring companies due to the fact that we’re respected, reliable, and trustworthy. For example, we issue secondary private bonds.
Will this growth come from overall growth in the sector or from an increase in your market share?
Both. The sector is expected to grow about 30% in 2011. Certainly, the factoring sector’s growth will be reflected in our figures, especially considering our standing in the sector. We stand to gain a lot from that growth.
How has Creditwest become so well known?
I think what sets us apart from the competition is our image, our human resources, our financial resources, and the tailor-made solutions we offer to our clients. Our human resources are perhaps the most important of those. We have a well-educated and experienced team. Many of them have worked together for more than 15 years. We work well together, we know each other, and our clients know us. We hire only the most qualified people. In addition to our factoring services, we also provide financial advice and consulting to our clients in this company. We know the credit markets, and we know finance. We will advise against the use of factoring in favor of, say, leasing or investment credits from a bank if we think factoring might not be the best option for our client. As for our image, that too is one of our strengths. We are a listed company and our main shareholder, Altınbaş, is well known and well respected in Turkey, and operates in jewelry, energy, and finance. Our track record speaks for itself—in our seven years of operations in Turkey we haven’t encountered a single hiccup. All of these factors build trust, familiarity, and assurance in the Creditwest name.
You’ve built one of the fastest growing companies in Turkey, and certainly one of the fastest growing companies in the factoring sector. What are your plans for Creditwest’s long-term future?
We plan on a much bigger balance sheet in the future. That means a balance sheet of more than TL1 billion. I think that should be our minimum size. Turkey will be a sizeable economy, and a company in that economy will have to be big to survive. Our shareholder is a strong company, we have a great relationship with our clients, and we have a great image in the business community overall. If we can’t achieve our goals with those kinds of strengths in our favor, then it will only be our own fault.
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