INSURING SUPPLIER CREDIT RISK IN EXPORTS TO PROMOTE EXPORT GROWTH AND ECONOMIC DEVELOPMENT

Purpose- The purpose of this study is to evaluate the effectiveness of the insured trade credit on the international trade abroad and in our country and to raise awareness about the issue that has great potential for growth in our country in the future. Methodolgy- The studies investigating the effect of the insured open account trade by private and officially supported export credit agencies on the development of exports and in general international trade were examined. The effect of export growth on economic development has been examined in order to assess the impact of export credit insurance. The fundamental concepts with the literature review have been summarized. Findings- Through the literature review, the following facts have been obtained. Supplier credit leads to the increase in sales of the supplier and that in turn leads to company growth. It is also an important financing source for the buyer who buys on credit also sells on credit and that leads to an increase in trade flows. It is complementary and alternative to bank loans especially in the periods of financial constraints when the companies are in need of working capital finance. Insured open account trade has a quite significant effect on increasing the exports of the country. At macro level, there is a dual causality relationship between export growth and economic development. Conclusion- As the result of the study, it has been concluded that the insured trade credit promotes the growth of trade flows and supply chains that would lead to the growth in trade volumes and economic growth