Works for establishing two new top investment funds in order to provide financial support for the entrepreneurs in Turkey have been finalized, Deputy Prime Minister in charge of economy Mehmet Şimşek told Anadolu Agency (AA). Şimşek said that the aforementioned investment funds would be worth a total of nearly TL 1 billion, and this amount would be transferred to venture capital funds.
Indicating that access to financing was one of the biggest problems for entrepreneurs in Turkey like the rest of the world, Şimşek said that to address the issue they have implemented important tools, applicable to the rules of the market mechanism, into Turkey with reform packages.
Stressing the fact that start-up entrepreneurs were evaluated in the high-risk group by the banks due to a lack of deposit and the difficulty in accessing loans, Şimşek stated that they have prepared a very important regulation in terms of providing support to the venture capital funds to solve this problem.
Recalling that this process started with legal regulations in 2014, Şimşek said: "The main pieces of the system have started to fall into place within a two-year period, and as of now, works for the activation of one domestic and two new top investment funds have been finalized. Top funds are the roof of the system. The next step involves venture capital funds which were transferred to capital by top funds and are still in the development process in our country. The bottom of the system consists of the venture firms which are the backbones of our country and the smallest structure of the ecosystem. The top funds of this system which is tightly connected together as the rings of a chain will be Turkish Growth and Innovation Fund established by European Investment Fund and Turkish Investment Fund activated by KOBİ Inc.
Stressing that these funds would be capitals - not debts - for the entrepreneurs, Şimşek said that this would save them from the interest burden and contribute to the improvement of their capital structures.
According to Şimşek, technology-oriented companies will benefit the most from these funds. "This system will activate on the point where their capitals are insufficient during their adaption process to the technological changes along with the changing market demands just when the entrepreneurs have to decide whether it is do or die in order to take the necessary steps towards improving their current capacities and accomplish their ideas." Şimşek said, adding that this system would provide not only financial support but also professional support for their institutionalization.