Some SMEs use barter due to interest, exchange rates
by Daily Sabah
ISTANBULAug 27, 2015 - 12:00 am GMT+3
by Daily Sabah
Aug 27, 2015 12:00 am
After big companies, which clung to foreign currency due to uncertainty and geopolitical risks that occurred after the June 7 elections, began to defer their debts and the banks increased credit interest by up to three points, they found new ways to keep the wheels in motion after the market came to a halt.
Companies located in regions such as İkitelli and İmes, where thousands of small and medium-sized enterprises (SMEs) have been established, have started to conduct their purchase and sale operations via the barter system. Moreover, many barter companies have opened offices in organized industrial sites in these areas. The sectors using the barter system the most include construction, tourism, insurance, advertising, textiles and food. Companies with a cash flow problem make their payments via the barter system for many expenses, ranging from advertising and raw materials to decoration and architecture.
SME owners said, "All banks have sent letters saying that credit interest increased by three points in recent weeks. We are having difficulty collecting debts from big companies."
Barter system is not a haven
Gülle Tekstil Chairman İsmail Gülle said: "While the number of barter transactions is increasing, people should be careful. In barter transactions conducted with large companies, you can get into debt in exchange for goods. For example, a barter company offers you an apartment valued at TL 200,000 ($68,380) for a debt of TL 100,000."
Wholesalers use barter system too
Southeast Young Businessmen Association President Hakan Akbal said: "We have nearly 100 members. Some of them have started to use the barter system. For example, a company producing windows bought food products from its debtor when it couldn't collect its debt. Then, it sold those products to someone else."
Some pay debts with cars
Turkish Footwear Industrialist Association President Hüseyin Çetin said: "SMEs can barter between themselves. For instance, a leather company was in debt to a company producing shoe soles. The leather company couldn't pay its debts and gave the company car to the owner of the company producing shoe soles."
The barter system is commonlyused in construction sector
Adana Chamber of Industry President Zeki Kıvanç said: "The barter system is generally preferred in the construction sector in this region. Those who make investments in the construction sector buy raw materials and pay their debts with an apartment flat. This method is also used in purchases of iron and ready-mixed concrete."
Demand has increased by 30 percent
Global Barter Operation Manager Enis Sargın said: "The number of people who have applied to the barter system has increased by 30 percent in the last month compared to the same period of the previous year. The barter system is mostly preferred in the real estate and construction sectors. Additionally, it is used in the advertising, food and car rental sectors. A barter check is used in this system as well. There is an authorization code on the check; after the authorization code is received, it is a guarantee to get one's money's worth."