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Credit Insurance

You can strengthen your financial structure with State-Backed Credit Insurance where the receivable amounts of SMEs arising from their credit sales are guaranteed against non-payment risk.

What is Credit Insurance?

State-Backed Credit Insurance is an insurance system which secures the non-payment risk of the debts arising from unsecured credit sales of the companies.

Such secured risks include the default of a buyer, for whom a credit limit is assigned, due to legal circumstances such as bankruptcy, arrangement of bankruptcy, liquidation etc.

Enterprises with total annual return between TRY 0-125 million, which have been established at least two years before the application, meet the risk assessment criteria determined by Extraordinary Risks Management Center (ERMC) and which are taxpayers other than simple entry can take out State-Backed Credit Insurance.

What is its content?

The content of the guarantee

  • The sales where the sale term is specified on the contract in the event of any sales contract between the insurant and the buyer and where the sale term determined by and between the insurant and the buyer is specified on the invoice in the event of absence of any sales contract are within the scope of the guarantee.
  • Other than sales within the scope of foreign currency invoices or contracts, the sales for which the invoices are issued in Turkish Lira are within the scope of the guarantee.

Circumstances Beyond The Scope of The Guarantee

  • Sales for cash, by credit card, with bank’s guarantee (guarantee letter, DDS etc.),
  • Sales to group companies,
  • Sales to state institutions and organizations, municipalities, chambers and commodity exchanges, employee associations, associations, foundations, public economic enterprises and non-trader natural persons are beyond the scope of the guarantee.

Advantages of Credit Insurance

  • Corporate management eliminates the receivable problems and focuses on main field of activity.
  • SMEs have the opportunity to get cost-effective collection service and reduces its costs.
  • SMEs can have information about the financial status and payment performances of the companies that they do business for a long time, however they can eliminate non-payment risk which may arise in acquisition of new customers by purchasing this product. Therefore, they can protect their companies against such unforeseen non-payment risks, strengthen their financial structures, help the corporate management to eliminate the receivable problems and focus on main fields of activity.
  • In the event of any problem in the collection of receivables, the insurance policy enters into force and SMEs can receive their payments within damage process, legal proceedings with respect to uncollectible receivables are followed by the lawyers of the insurance company.

  • Criteria to be used in the assessment of the risks with respect to buyers in favor of whom the guarantee is provided within the scope of credit insurance are determined by ERMC.
  • Both current buyers and potential new buyers to be collaborated during the policy period are analyzed and their risks are assessed. As a result of such risk measurement, each of the buyers is rated between “1 (Lowest Risk)” and “6 (Highest Risk)”.
  • A limit is allocated to the buyers rated between 1 to 5 based on the credit limits demanded.
  • Click to view detailed information about State-Backed Credit Insurance

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