Turkish Credit Information Market Dr. Selim Seval FEBIS Annual Meeting Palermo September 24, 25, 26, 2008

History Credit information services began in Turkey in 1980s when The Turkish-British Chamber of Commerce Association began delivering data on Turkish companies to Dun & Bradstreet in the UK. Finar was established in 1989 and commenced operations as a correspondent and distributor of D&B in Turkey. Later Finar was appointed as a member of the D&B Worldwide Network. A year before Anorbis had commenced business as a provider of credit information to foreign credit insurers and information companies. As a major leap forward in 1990, Finar started selling D&B branded BIRs on Turkish companies to Turkish businesses. In 1996, Finar started to advise banks and other financial institutions as well as some large scale corporations on credit scorecard development and implementation issues. Consequently, Finar D&B launched two state-of-the-art software geared to taking automated credit decisions which major banks are now using: RiskMetre and DecisionMetre.

Major Players ANORBIS Established in 1988 Over 120,000 company files Provides a service to over 75 companies in five continents DTB Founded by an ex-Eximbank employee No data available on database Finar D&B Established in 1989 Nearly 380,000 companies now, about 1,200,000 companies by the end of 2008 Serves with all D&B products and services applicable in the Turkish market

Legal Filing Requirements & Data Availability Availability of financials ● All companies must file their financial statements to the Tax Office. It is not compulsory for proprietorship concerns to prepare formal financial statements provided that their annual sales turnover does not exceed 140,000 YTL. ● The Tax Office does not release or share this data. Unless the companies provide, there is no way to obtain financial statements except for listed companies whose financials are publicly announced quarterly. There are about 300 listed companies. ● Companies publicly issuing debt instruments must also publish their accounts but due to economic conditions only a few of them do so nowadays.

Availability of payment data ● Restricted to banks only. The Central Bank is managing the database of defaults on promissory notes and post-dated checks and is distributing the data to banks only. There is no available data on payments against open accounts. Non-bank companies do not have access to payment data. Very recently, this task has been transferred to the Bank Association. It is expected that non-bank financial institutions will also have access to this databes soon. ● A central database of black list on individuals is maintained by the consumer credit bureau owned by the banks. This database is accessible only by shareholder and member banks. The same bureau recently extended its operations to act as a Corporate Credit Bureau. Very soon, the payment performances of the companies to the banks will be also available through this bureau. But again this will be a financial institution club members only service. Legal Filing Requirements & Data Availability

Availability of court decisions ● Court information is very difficult to gather; courts are widely scattered across the country and there is no electronic link among them. Recently, under e-government project, the Ministry of Justice has developed a database for some court decisions. However, only lawyers are allowed to have access to this database and only for the cases they are involved in. ● Some court decisions such as seizure of property, bankruptcy notices may be occasionaly published in the media. Verbal information can be obtained from banks on an informal basis. You need to have a good relationship with banks to do that.

Data Sources in Turkey Trade Registrar's Offices and Trade Registry Gazette Registration date/Registry number Date started Articles of association Annual returns Name changes Legal form changes Resolutions of the annual shareholders meetings Shareholders and percentage of shares held Recent capital increase decision

Data Sources in Turkey Post Telephone Telegram Directorate Search tools on Internet Newspapers and Magazines ● some court decisions (legal enforcements, bankruptcy, composition of debt etc.) ● mergers and acquisitions, privatizations ● new operations ● branch openings ● crime reports and custody of the principals ● international rating changes ● large–scale credit agreements, etc..

Data Sources in Turkey Official Websites ● Istanbul Chamber of Commerce ● Istanbul Chamber of Industry ● Izmir Chamber of Commerce ● Banks Association in Turkey ● Foreign Capital Association ● Automotive Manufacturers Association ● Istanbul Stock Exchange ● Turkey Privatization Administration ● International Transporters Association ● Advertisement Companies Association ● Chamber of Shipping etc.

Data Sources in Turkey Reference Books and Catalogues ● Top 1000 Industrial Establishments in Turkey ● Fortune 500 Turkey (Prepared by Finar D&B) ● Report of Insurance Activities in Turkey – Insurance Inspection Board ● Report of Insurance Companies in Turkey ● Hotel Guide of Turkey ● Top 500 IT Companies Guide ● etc.

Finar Portal ● press cuttings concerning the subject companies and their shareholders ● public court resolutions ● payment defaults (obtained from banks) ● black lists (in collaboration with financial institutions) ● bankruptcies ● legal suits ● other legal restrictions and charges Data Sources in Turkey – Unique to Finar

Turkish Business Universe Registered Companies in Turkey There is no official source in Turkey from which the exact figure can be obtained. There are completely different estimates as stated below: ● Over 1,200,000 companies of various sectors and scales are registered countrywide. (Source: Turkish Association of Chambers of Commerce and Exchanges - TOBB 2007) ● 2,869,501 proprietorships registered in the Merchants and Craftsmen Union as of March 31, (Source: Merchants and Craftsmen Union - Esnaf ve Sanatkarlar Birligi) ● 3,160,000 registrations of all kinds of companies from various sectors - including inactive ones. (Source: Istanbul Chamber of Commerce)

Finar Database Coverage Total number of records: 378,642 Records with a rating: 38,756 Number of Rated Companies in 2008: 9,148 as of July 2008 Number of Rated Companies in 2007: 8,905 Number of rated records with full financials: 12,345 Number of rated records with major financials: 17,531 Number of rated records with basic indicators: 8,880

Finar Linkage Coverage/ Group Relations Number of Groups Identified: 11,000 Number of Linked Companies: 44,500

Database Coverage by SIC Distribution according to SIC Codes (Activities) Agriculture, Forestry, Fishing1 % Mining1 % Construction5 % Manufacturing34 %34 % Transportation, Communications, Utilities6 % Wholesale Trade39 %39 % Retail Trade3 % Finance, Insurance, Real Estate2 %2 % Services7 %7 % Public Administration1 %1 % Non Classifiable Establishments1 %1 %

Database Coverage by City Codes Geographic Distribution ADANA2 % MERSİN2 % ANKARA10 % TEKİRDAĞ1 % ANTALYA1 % İSTANBUL53 % BURSA3 % KONYA1 % DENİZLİ1 % İZMİR7 % GAZİANTEP1 % KOCAELİ2 % KAYSERİ1 % OTHER15 %

Distribution of Turkish Ratings - according to Finar Rating

Report Formats Identification D-U-N-S® Number Company registration number Company name Registered address Business address Phone/fax/ Evaluation D&B Rating / Finar Rating Credit limit recommendation Payment performance Summary Employees Line of business Legal form Start date Principals Name/title Personal details Bankers Public Record information Corporate history Ownership Legal form, Registration Gazette Information Corporate structure Corporate family tree Branches / Divisions Operations Financials Financial statements (if available) Three-year financial comparisons Performance ratios Special Events Press cuttings Future plans Recommended terms and conditions (if requested) Report contents may be customizable according to customer needs and may be delivered in XML data format.

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