The place of concumer finance companies in the financial system and its comparative examination with other credit instutions in Turkey

In Turkey, the financial liberalization beginning in the years of1980?s to integrate to world economy help to appear new financialinstruments and institutions. One of these institutions is consumer financecompanies. The primary function of these companies appearing first in 1995is to provide consumer credit for consumers in the Turkey. At the beginning,they have given not only consumer credit but also credit card. The abroadcapital also takes place in these institutions and they give credit toconsumer in the place where goods and services take place in. Althoughthey provide credit for lots of goods and services, the sector of automotivethat is given is the most in Turkey. It is observed that these institutionsmostly established within the holding company and they finance sellingwhich is the saled or produced by holding company.In the present, there are nine consumer finance companies inTurkey. In the past although credit cart was given to consumers by thesecompanies, but now they only give consumer credit. The BDDK isresponsible for these companies all respect such as their establishment toits odit since 01.01.2006.In the thesis, consumer finance companies operating in Turkey andtheir credit transactions are examined. Besides, other financial institutionsare also discussed in order to understand the importance of the consumerfinance companies in the overall financial system. Other institutions thathave a role in Turkish financial system are the banking sector institutionsand leasing and factoring companies. Banking sector has been examined inthree different institutional structures namely deposit banks, developmentand investment banks and participation banks. The credit volume of theconsumer finance companies and banking sector is easily seen from thefinancial statements. However, this situation is not valid for leasing andfactoring companies. Because of this reason, in the thesis it is alsoexplained how to obtain the credit volume of those institutions from their2financial statements in order to be able make comparisons between all thefinancial institutions. This explanation was conducted according to theESA95 system, which is the main guide to produce data standards neededto make comparisons between the Union member countries. Besides, thiskind of approach to the subject is more meaningful considering theEuropean Union accession period of Turkey.Finally in the thesis, the importance of consumer finance companieshas been stressed and it is concluded that the variety of the financialproducts that are served by consumer finance companies and assurance offinancial sources that are provided to consumer finance companies arerestricted due to the problems in legislationKey Words: Financial System, ESA95, Consumer FinanceCompanies, Credit, Consumer Credit.