The following is a summary of the Sekerbank visit during the 2011 International Study Study to Istanbul and Munich. Students were asked to submit their thoughts and impressions on the various company and cultural visits. The following was submitted by Jeff Steiner and Todd Colter, Class of 2011.
Our visit to Sekerbank was outstanding! We were greeted by Mr. Cenk Eynehan, VP of Investor Relations & Subsidiaries Department who started right into a presentation that described that Sekerbank is the leading bank in Turkey (Top 500 in the world, due to backing in from other banks closing / mergers) for SME financing, not owned by the state. Mr. Eynehan explained that over 50% of their loans go to micro, small and medium enterprises and that they see significant opportunity in the region to offer loans and provide banking to people that have never worked with a bank before.
Mr. Eynehan told a funny story about living in the United States with his wife and dog. In short, his wife was denied credit, but his dog was given a credit card with a little over $1000 limit. He tied this back to working with customers in Turkey, as they want to know personally, those that they loan to. It is a very different form of relationship building than we are used to in the United States, as their bankers actually visit the person, work with them to develop balance sheets and cash flow statements, to make sure that all understand exactly what is taking place and see where the money is going. The US seems to be more impersonal; otherwise, dogs would not be receiving credit cards.
Currently, the inflation rate is roughly 7-9% annually, which we heard from numerous companies in Turkey, is a great inflationary percentage for their growing economy. Back in 2000, Turkey was seeing an inflation rate of 60%, which Mr. Eynehan joked that if you took a cab from the airport across town, your ride would cost you much more when you arrived than expected when you got into the cab.
Mr. Enis Bulca, the Small Business & Agriculture Banking Marketing Department Manager, took over the presentation about halfway through and began speaking about their actual loan procedures and the numbers involved. The interest rates range from 14% for small business loans, 16-17% for micro loans, 18% for craftsman up to 22% for agriculture loans, but to me the most interesting number was the 9.5% interest rate offered on savings accounts to customers of the bank. The smallest loan that the bank offers is the equivalent of $500 USD, and they are trying to use Experian (among others) to provide a reliable measure for credit ranking, but typically, these are people with little to no credit history.
Of Sekerbank’s strategy, the part that was most intriguing was the goal to open branch locations in portions of the country that are currently not served by any banks. The biggest challenge is working with people who have never worked with a banking establishment at all. The main way they are trying to overcome the resistance and skepticism is by hiring local people to run the branches in an attempt to convince people in the area that working with a bank is a good idea and that Sekerbank is a trustworthy organization.
A final point in conversation revolved around the feelings of joining the European Union; on this subject, Mr. Eynehan expressed mixed feelings. On the pro EU side, he felt that it would be good for a country with a 95% Muslim population to join a predominantly Christian and Catholic demographic. It would also level the playing field for getting money into and out of the Turkey. One major reason for being against joining the EU at this time revolves around the growth of the region. Mr. Eynehan expects a growth rate of roughly 6-7% per year over the next decade, which would be stifled by sharing a common currency with the rest of Europe, which is not growing nearly as quickly. Being a part of the EU would also allow banks and other corporations within Europe to eat into their share of SME loans because it would make it easier to move into the country.
Overall, the visit to Sekerbank was one of our favorites on the trip, and we were treated very well by the host company. We would highly recommend that, if the program were to return to Istanbul, another visit should be planned to Sekerbank.
One last thing for those of you interested, yes, you can open a savings account online.