Turkish agritech Tarfin to issue Sukuk facilities in next three months

Tarfin, a Turkish agritech platform providing farmers with access to farm inputs with financing solutions through a point-of-sale network, is looking to issue up to three Sukuk facilities in the next three months, Kerimcan Aycibin, CFO of Tarfin, told ISFI.

“We have TRY310 million (US$16.65 million) of the existing available Sukuk issuance limit from the local Capital Markets Board. We plan to use this limit in full in the next three months,” Kerimcan shared.

Upon utilizing its existing limit, Tarfin will apply for a new limit at the beginning of 2023 for further issuance. The additional offerings would take place by the first half of 2023 at the end of the agricultural season, Kerimcan added.

The upcoming facilities will have tenors between 250 and 270 days. Tarfin’s Sukuk maturities are aligned with the terms of the underlying receivables of farmers. Maturities of issuances approaching the end of the agricultural season will be shorter leading up to the harvest season.

Tarfin has so far offered two Sukuk facilities with the first Sukuk offering worth TRY40 million (US$2.15 million) completed on the 7th July 2022 and the second offering worth TRY50 million (US$2.68 million) completed earlier in November this year. Its debut issuance was the first Sukuk facility for the Turkish agricultural sector.

Both facilities were issued by Kalkinma Yatirim Varlik Kiralama as the Capital Markets Law in Turkiye requires private sector Sukuk offerings to be made through banks or regulated entities permitted to issue Sukuk.

Also in the Turkish agricultural space, Hasfin is looking to issue its second Sukuk worth TRY35 million (US$1.88 million) by the end of December 2022. Hasfin entered the Turkish Islamic capital markets with its inaugural TRY10 million (US$537,100) Sukuk facility in October 2022.

According to World Bank data, agriculture, forestry and fishing contributed to 5.6% of Turkiye’s GDP in 2021. The Turkish Statistical Institute, the country’s official statistics provider, estimates the production quantities of cereals and other crops, with the exception of fodder crops, to increase by 14.3% and the production of fruits, beverage and spices crops to increase by 3.8% this year as compared with 2021.

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