The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group, has signed a Memorandum of Understanding (MoU) with Turkey's Small and Medium Industry Development Organization (KOSGEB), to enhance cooperation and coordination in trade finance for the development of SMEs.The signing ceremony took place during the 32nd Session of the Standing Committee for Economic and Commercial Cooperation at the Organization of the Islamic Cooperation (COMCEC) meeting in Istanbul last week. The MoU was signed by ITFC CEO Hani Salem Sonbol and KOSGEB President Recep Biçer with high-level representatives from both entities in attendance.During the ceremony, Biçer, on behalf of KOSGEB, said he believed the MoU they have signed with the ITFC would provide and enhance opportunities for SMEs in Turkey to grow tremendously in a short period of time benefiting from the facility provided by the ITFC. He also added that the MoU would also enhance cooperation and coordination in their finance sector.Sonbol in his statement said: "As a developmental institution, the ITFC is dedicated to providing Islamic trade finance among its member countries and the rest of the world to improve the lives and the well-being of people. The ITFC does not limit its activities to trade financing only, but also assists its clients with business advisory services, introduce them to different partners in other OIC member countries, building capacities of SMEs in collaboration with local institutions and exchanging expertise and experiences among traders through reverse linkages."The MoU also examines the possibility of providing Islamic Trade Finance solutions to SMEs in Turkey. The suggested cooperation program includes developing joint programs for capacity building activities for SMEs in Turkey and Reverse Linkage Programs for transferring KOSGEB's know-how to other OIC member countries.In a special interview with Daily Sabah, Sonbol shared his areas of interest for cooperation in Turkey. ITFC plans to provide $1 billion for Turkish firms in the near term.Daily Sabah: What are the possible areas of cooperation between Turkey and the ITFC? Which sectors do you consider to be the most strategic ones?Hani Salem Sonbol: Since the inception of the IDB's trade financing programs, Turkey has been one of their major customers. An amount exceeding $2.78 billion was approved between the years of 1977 and 2008 for the country, which represents about 10 percent of the IDB's total trade financing approvals.Following the establishment of the ITFC in 2008, the ISBG's trade financing in favor of Turkey increased further and 72 financing operations for a total of $3.4 billion have been approved so far in Turkey since the inception of the ITFC.With implementation of the strategic pillars of the first Member Country Strategy Paper of Turkey, asset backed structured finance and export financing mechanism operations have been developed and implemented to fulfill the mandate. It is worth noting that the ITFC's intervention in the country expanded further when it started its operations in Turkey the CGO at the beginning of 2014 after which the trade finance approval size reached around $1.8 billion.Supporting SMEs especially for their export financing requirements is one of the strategic pillars of the ITFC. It has given priority to partnerships with local banks in Turkey for developing export financing facilities for SMEs. In this regards, the ITFC's partnership with Turk Eximbank is worth a mention. The ITFC has provided a total of $1.7 million in trade financing through Turk Eximbank for the benefit of Turkish SMEs mostly for their export financing requirements.D.S.: Is there any tailor-made solution designed specifically to finance and promote Turkey's foreign trade?H.S.S.: As of today, the ITFC has a diversified portfolio in Turkey through local banks (mainly the Participation Banks, Turk Exim Bank and Investment Banks) for a line of financing made available to the benefit of SME-size Turkish exporters and importers.Meanwhile, large corporates are benefiting from direct lines, especially under the structured trade finance facilities, which provide tailor made solutions for the import or pre-export financing needs.Engaging in real trade activities is one of the pillars of Islamic Finance and the ITFC provides structured trade finance solutions to Turkish companies especially for the commodity the ITFC's positions itself in the business cycle of its clients, which means much more than conventional financing mechanisms and I believe other Islamic Financial Institutions should also actively participate in structured trade finance deals.D.S.: Tell us more about the recent MoU you signed with Turkey's Small and Medium Industry Development Organization (KOSGEB)?ITFC does not limit its activities to trade financing only, but also assists its clients with business advisory services by introducing them to different partners in other OIC Member Countries, building the capacities of SMEs in collaboration with local institutions and exchanging expertise and experiences among traders through Reverse Linkages.Being a governmental institution that provides development services and support programs to SMEs and entrepreneurs, KOSGEB is one of our strategic partners in Turkey.The purpose of this MoU is to provide for ways of ensuring mutual cooperation and coordination of joint efforts between the ITFC and KOSGEB in:I. Providing Islamic Trade Financing solutions to SMEs in TurkeyII. Developing joint programs for capacity building activities for SMEs in Turkey and vice versaIII. Linkage Programs for transferring the know-how of KOSGEB to other OIC MCsIV. Arranging study visits and implementing technical co-operation programsDS: What impact have the current economic challenges had on intertrade between OIC member countries and what is the ITFC's reaction that?HSS: The world has faced tough challenges over the course of 2016 in the wake of an economic slowdown, weak economic performances, increasing geopolitical risks, climate change and social unrest which affect the major economies as well as those of the developing world. In the face of these mounting challenges, the ITFC has always perceived challenges as opportunities, preparing several initiatives to mitigate the full impact of these developments on world economies.The ITFC is working to strengthen its partnership with regional and local banks to serve both the private sector and Small and Medium enterprises (SMEs), while also exploring new business opportunities in OIC member countries. Difficulties in the operating environment notwithstanding, ITFC has expanded the scope of its trade support intervention measures to include Integrated Trade Programs aimed at meeting the needs of OIC member countries. As I have mentioned previously, some of these Integrated Trade Programs will give the ITFC an international platform as a major provider of trade finance solutions and a leading trade development organization. The solutions we have set forth will provide resources tailored to trade finance and trade developments which will benefit the economies of developing countries.