Industry & Export
Export Credit Insurance: Türk Eximbank and International Options
At a glanceExport credit insurance is the mechanism that enables Turkish medical device manufacturers to offer open account terms to international distributors — accelerating sales, building commercial relationships, and expanding into higher-risk markets — without bearing the full financial risk of distributor default or country transfer failure. This guide covers the Türk Eximbank programmes in detail, international export credit insurance alternatives, and how to integrate credit insurance into your export payment strategy.
Part 01
What Export Credit Insurance Covers
Export credit insurance protects Turkish manufacturers against two primary risks in international sales:
Commercial (Buyer) Risk
- Buyer insolvency or bankruptcy before payment
- Buyer default — protracted non-payment beyond contractual terms (typically 6 months)
- Buyer repudiation of contract after shipment
- Maximum coverage: typically 85–90% of invoice value
Political (Country) Risk
- Government moratorium on foreign debt payment
- Currency inconvertibility or transfer restrictions
- War, civil disturbance, or expropriation affecting payment
- Maximum coverage: typically 90–95% of invoice value
Türk Eximbank — Programme Overview
Türk Eximbank (Türkiye Export Credit Bank) is the primary export credit insurance provider for Turkish manufacturers. Key programmes:
| Programme | Coverage | Max Term | Premium Range |
|---|---|---|---|
| Short-Term Export Credit Insurance (Kısa Vadeli İhracat KSİ) | Commercial + political risk on open account sales to private buyers | 360 days | 0.15–0.80% of invoice |
| Specific Export Credit Insurance | Single buyer/contract — capital equipment, project sales | Up to 5 years | 0.20–1.50% per annum |
| Forfaiting Support | Supports Turkish banks in forfaiting export receivables | 1–5 years | Variable |
| Buyer Credit Programme | Lends directly to foreign buyers to purchase Turkish exports | 1–7 years | LIBOR/SOFR + spread |
Short-Term Export Credit Insurance — The Core Product
The Kısa Vadeli İhracat Kredi Sigorta (KSİ) programme is the most widely used Türk Eximbank product for medical device exporters selling on 30–180 day open account terms:
- Who can apply: Turkish exporters with minimum USD 100,000 annual exports; apply through your commercial bank or directly at eximbank.gov.tr
- How it works: You establish a policy covering a portfolio of buyers. Türk Eximbank assigns credit limits to each buyer based on their financial assessment. You can sell up to the approved credit limit on open account — if the buyer defaults, Eximbank pays 85–90% of the invoice after a waiting period (typically 6 months from due date)
- Coverage territory: All markets — country risk ratings affect premium rates; OECD Category 1 (low risk, e.g. Germany) commands lowest premium; Category 7 (high risk, e.g. certain African markets) commands highest
- Premium calculation: Buyer risk category × country risk category × invoice tenor × invoice value
- Claim process: Submit claim after waiting period with documentation (invoice, shipping docs, proof of delivery, demand letters); Eximbank pays within 30–60 days of claim approval
OECD Country Risk Categories — What Turkish Exporters Need to Know
OECD maintains country risk classifications (Categories 0–7) used by all ECAs (Export Credit Agencies) globally to price political risk:
| OECD Category | Risk Level | Example Countries | Premium Impact |
|---|---|---|---|
| 0 | Lowest | EU, USA, Japan, Australia | Minimal political risk premium |
| 1 | Very Low | Chile, Israel, Saudi Arabia (conditional) | Low premium |
| 2 | Low | Colombia, Morocco, Jordan | Moderate premium |
| 3 | Moderate | Philippines, Indonesia, Kenya | Moderate-high premium |
| 4–5 | Medium-High | Nigeria, Ethiopia, Ukraine | High premium |
| 6–7 | High-Very High | Iraq, Libya, Yemen | Very high premium or coverage unavailable |
International Export Credit Insurance Alternatives
For Turkish manufacturers not using Türk Eximbank (or needing additional capacity), international private market alternatives exist:
- Euler Hermes (Allianz Trade): World's largest private credit insurer — offers global open account credit insurance with strong emerging market country coverage; Turkish companies can apply directly
- Coface: French ECA and private credit insurer with strong Africa, Middle East, and Mediterranean coverage — particularly relevant for Turkish francophone Africa exposure
- Atradius: Dutch private credit insurer with strong European and Americas coverage
- ICIEC (Islamic Corporation for the Insurance of Investment and Export Credit): IDB subsidiary providing Islamic-finance-compliant export credit insurance for OIC (Organisation of Islamic Cooperation) member country trade — relevant for Turkish exports to Muslim-majority MENA and African markets
Integrating Credit Insurance Into Your Export Payment Strategy
Credit insurance works best as part of a structured payment strategy that aligns risk level with payment instrument:
- Year 1 with new distributor (any market): L/C or advance payment — no credit exposure regardless of credit insurance status
- Year 2–3 with proven distributor: Credit insurance policy + open account 60 days — enables relationship development with controlled risk
- Established distributor (3+ years, clean payment history): Credit insurance + open account 90–120 days — reward loyalty with terms that improve distributor cash flow
- High-risk country (OECD 5–7) regardless of distributor relationship: Credit insurance + D/P documentary collection — never open account in very high risk country environments
Export credit insurance is the missing link between a Turkish medical device manufacturer's ambition to grow international sales and the financial discipline to do so without accumulating dangerous receivables risk. Türk Eximbank's KSİ programme is accessible, affordable, and specifically designed for Turkish exporters — the administrative burden is modest and the protection is substantial. Any Turkish manufacturer selling on open account terms in markets with OECD risk rating 2 or above should have export credit insurance in place. The premium cost — typically 0.2–0.8% of invoice value — is easily absorbed in export pricing and is far lower than the cost of a single significant distributor default.