Onur Terzi
TEB
Agricultural Banking Sales Senior Manager
Onur Terzi is Agricultural Banking Marketing and Business Development Senior Manager at TEB. He tells Qorus more about what the Turkish bank does and plans to do for the farmers.
Could you briefly provide information about the agricultural banking landscape in your region, highlighting any unique challenges the sector needs to deal with?
Since 2021, Turkey has been grappling with high inflation, which has had a substantial impact on the agricultural sector, periodically causing financial difficulties for farmers. While inflation is expected to decrease in 2025, the financial challenges faced by farmers persist due to ongoing inflation around 40%. High inflation gives rise to three primary issues:
• High and unpredictable agricultural input prices
• Price increase in agricultural product prices lower than the inflation rate
• Increase in financing costs due to high interest rates
The three factors mentioned above directly affect the agricultural loans market. Farmers whose profitability decreases are forced to invest less. The high cost of financing reduces the demand for loans for input purchases, resulting in production with insufficient inputs or high debt risk.
A decline in farmers' profitability can result in a reduction in credit limits and repayment difficulties. In Turkey, the agricultural financing market is dominated by state-owned banks, which provide subsidized loans with zero interest rates, helping farmers to partially close the financing gap more cheaply. However, since these loans are limited, farmers often turn to private banks like us for additional financing. Consequently, farmers strive to maintain a balanced financial situation.
According to official figures, Turkey has 2.1 million registered farmers, the majority of whom utilize banking services. However, challenges related to credit access persist, often due to high interest rates and inadequate collateral. Notwithstanding these difficulties, the adoption of mobile banking among farmers is growing rapidly. Concurrently, there has been an emergence of a preference for advanced technology, as evidenced by the proliferation of applications such as drone spraying in large fields and IoT-based pesticide control systems. These developments present novel credit opportunities.
