Aligning agribanking strategies with trends of the future: DenizBank 05 October 2021

Sinan Kosovali, Vice President - Agricultural Banking Marketing at DenizBank, talks with Efma's Lukas Dzuroska about how they approach the key questions of agricultural banking. 
In your opinion, what role can banks play in the sustainable agriculture movement?

We believe that sustainabilty in agriculture is depending on many factors, finance is one of them and also finance is a key to reach other critical instruments to pursue the farming activity. Thus banking and banking organisations especially focused on supporting farmers will be more important than they have been yet. 

As we check over the common problems all over the world, we can clearly see that agro business will face the difficulties of raising populations, urbanization and decreasing amount of available farmlands to produce. Also raising population will demand more protein based foods with the increase of the average income and wealth all over the world. So farmers have to boost the productivity and harvest more from a smaller land. With the new farming methods depending on technology and digitalisation, that “boost effect” could be possible. 
But of course that change in production ways need a transform especially on tehcnological assets. Banks will be the most important part of that transforming process by supporting the investment of farmers.

Can you briefly give us a picture of agricultural banking’s place in your structure/strategy?

DenizBank is the market leader among all private banks in Turkey, with a market share of % 47 on agricultural loans. State banks are out of the scope as they could provide subsidy loans far more cheaper at costs but if we add them to the picture, our market share is % 12. 

1.1 million customers choose DenizBank for their needs, that is more half of the total farmers. DenizBank is the only private bank having a seperate business line for agriculture and we have branches all over Turkey, even in the cities with a population lower than 5.000. 

With 400 branches and more than 1.000 employees working in agricultural banking department, we can clearly claim that we are far ahead of the competition. Our investments in the business; financial, technological and human resource developments are increasing every year. 
As an 18 years old agricultural bank we are relatively younger but as our motto says “Bank of Farmers – DenizBank” summarize our place in the business.

Agriculture is made up of so much more than just farms. How does your bank approach the ag supply chain and ag tech companies (digital agriculture ecosystem)?

As a bank mostly focusing on farmers, it is impossible not to contact to other partners of the business. We provide banking products and solutions to farmers but as we get in touch with the farmers in their business, we work with the leading companies of industry. 

We work with agricultural input producers such as fertilizer, seed, silage etc to make it easy for farmers to reach needs of their activity and pay their debts after harvest. We also work with food industry for their financial needs to purchase crops from farmers. Thus we are in every process of food chain actually.

We are also supporter and leading member of technological integration and digital transformation of the business. While making specially designed campaigns for technological equipment loans, we are also interested in innovation projects. 

Neohub, a subsidiary of DenizBank to focus on innovation&incubation, is highly concentrated on the agriculture sector. Agricultural technologies such as sensors, soil analysis equipments, satellite technologies, livestock management systems tend to develop and spread in Turkey. Neohub discovers and supports start up&ideas focusing on agro business and even invests in those organisastions. 

Could you briefly describe your top best practices/projects in agri banking amid technological revolution (digitization, AI, data)?
Producer Card, the leading financial innovation of the sector, is at the top of our best practices. With the Producer Card, farmers manage to purchaseevery single need of farmlands with a plastic card and re-pay their debts after the harvest time. Their period for repayment and card limit is being calculated automaticallyaccording to the region and crop type within seconds. Cooperation with sector’s biggest companies, farmers can get their needs with special campaigns and non-interest periods up to 6-7 months. More than 600K farmers use Producer Card as a financial instrument, as we know there were 2.1 million farmers in Turkey almost every 1 farmer of each 3 farmers are using Producer Card.

We can also talk about our digital environment Deniz’den Toprağa (we can translate as ‘Through Sea to Soil’, Sea stands for Deniz of our name) as a leading party of Turkish digitalization ecosystem in the business. With Facebook and Instagram page, web site and prize winner mobile application; Deniz’den Toprağa is the most known and common digital platform of agriculture business. Especially with it’s features such as monitoring through satellites, ask to agricultural engineer online, weather forecast, news, banking functions; our mobile application has been downloaded more than 260K farmers. We are still developing and adding new functions both in agricultural advices part and banking part. 

What are the key priorities in your agriculture value proposition in the upcoming 2-3 years?

We believe that smart farming and technological integration will be the most important issue in future of farming. Thus while supporting tech companies, we are also working on the digital transformation of the business. Average age in the business is more than 55 but upcoming generations tend to act differently comparing to older farmers. To boost the productivity and cut the costs, they benefit from the science, technology, digital tools while they also benefit from the historical know-how coming from their parents and ancestors. This combination will make the business more profitable and so sustainable in our point of view. 
Customers nowadays ask more from banks and financial institutions about their business. Not only financing for their needs, but also to create environments to sell their products to new customers or markets is a trend demand coming from customers. That is a kind of cooperation and advisory service about marketing and we believe that the relation between banks and customers will get more sophisticated and close. As a leading bank in the sector we are also preparing our abilities for that demands and opportunities.





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