A MODEL PROPOSAL BASED ON SELEM FINANCING METHOD IN PARTICIPATION BANKING


The economic activity that constitutes one of the most important livelihoods by shaping human life conditions in history is agricultural production. One of the most important issues in ensuring the continuity of this production process is the diversification of the financing sources of agricultural production. Participation banks in the diversification of these resources can play an effective role in production, processing, sales and financial processes from producer to consumer. In this context, one of the interest-free financial instruments that can be used in the financing of agricultural production is the selem method. Selem is a contract which is based on the sale of certain quality and quantity amount of goods to the cash price for delivery a later date. It is generally used as an important financing technique for the short-term cash needs of farmers and small traders in agricultural production in world applications. Selem is not used in Turkey due to some risk factors. This method can be a suitable tool for those who have financial problems in agricultural production and who do not want to bear the financial and moral costs of interest. In this study, selem financing method was investigated and the risks of this method were analyzed in terms of participation banks. In this method, the storage and sales of these products are important risk factors for the participation bank, which is the buyer of agricultural products. Due to the current position of banks in financial markets, these risks should be minimized by various means in order not to reflect these risks as a cost to banks. A model proposal was prepared by using the Licensed Warehousing System and Product Specialized Exchange / Trade Stock Exchanges in order to store and sell the agricultural products subject to the Selem contract.


Keywords


participation banking, agricultural production, selem, licensed warehousing system, product speciali

Author : Onur ŞEYRANLIOĞLU -Alper KARAVARDAR
Number of pages: 523-538
DOI: http://dx.doi.org/10.29228/TurkishStudies.22870
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Atıf Sayısı: : 3
Turkish Studies-Economics,Finance,Politics
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