I am reposting from the Personal Finance & Money Stack Exchange because my question was flagged as being about economics and off-topic.

The post-dated cheque is the most common payment instrument for internal commerce in Turkey. According to the data published by The Banks Association of Turkey, ₺784 billion (equivalent to \$208 billion in December 2017) worth of payments were processed through cheques, most of which are believed to be post-dated. To compare, Turkey's total exports were worth ~$150 billion in the same year.

The reason for me asking this question is: I have been hearing from numerous people that the usage of the post-dated cheque as a financial instrument is unique to Turkey. That is obviously not true; there are other countries that allow post-dating cheques, e.g. Canada.

However, the argument is that the majority of payments are made with post-dated cheques, which could indeed be unique to Turkey. In Turkey, when someone writes you a post-date cheque, you can use that cheque to pay someone else. The process is described by most as minting money on-the-fly. Used as legal money, cheques change hands frequently, and you can find yourself paying for property using a cheque written by someone you don't personally know. Only when the date comes can the cheque be cashed in by its n^th holder, realizing its value promised to its 1st holder. This highly exaggerates the number given above (₺784 billion) which does not reflect how many times a cheque was used in payment.

This essentially forms a network of trust that operates in parallel to the banks. The reason I have been told is that the banks are owned by the holding companies of Turkey, and their operational capabilities outside the financial domain make them competitors to every other company. Thus a businessman in Turkey has an excuse not to disclose his financial/business history to banks; it's like leaking information to your competitors. So instead of taking out a loan, they write post-dated cheques. Again, I am relaying what I have been told.

Given the situation in Turkey, are there any other countries with similar financial habits? Or do the countries listed in Wikipedia (Australia, Canada, India, Serbia etc.) see only limited use?


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Iran is another similar case, however in Iran use of post-dated cheques are mainly due to difficulties that a businessman will face if he wants to use bank loans. For example banks usually have a well-known precondition for extending loan to firms and households which is providing sufficient liquid collaterals. For finding more theoretical elaborations you can search for "access to credit" literature which tries to elaborate why banks do not have sufficient incentive to provide credit to some people.


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