Türkiye is set to provide approximately TL 30 billion ($768.7 million) in credit to manufacturing small and medium-sized enterprises (SMEs) through the new guarantee package prepared within the framework of the efforts to support the real sector, according to a report Friday.
The package was announced following remarks by President Recep Tayyip Erdoğan, who in his speech on his return from Hungary, where he attended the informal summit of the Organization of Turkic States (OTS), stated that they attached importance to the Credit Guarantee Fund (KGF) to support the business world.
"It would be beneficial to take the step at this point and pour water into the pump from KGF so that it can get moving. God willing, we will take a different step in the new period. I have also made the necessary instructions to our relevant friends regarding this issue. We are currently in the process of preparing for this," he said.
Erdoğan also emphasized the positive results in the economy and the fall in inflation.
"The decline in inflation increases predictability. We saw the lowest level in the last 40 months. While these developments improve expectations in the country, they are also positively reflected in terms of access to external financing, Türkiye's credit rating. We are paying close attention to financial stability and growth dynamics as well as price stability to continue this positive picture," he said.
The annual inflation slowed down to 37.9% in April, following a continued downward trend since it peaked around 75% in May last year. The country's central bank projects it will drop further to 24% by the end of the year.
However, amid a continued period of higher borrowing costs due to elevated rates, supporting small businesses is important in facilitating their access to financing.
Accordingly, as per the information obtained by Anadolu Agency (AA) from the Treasury and Finance Ministry, a new one will be added to the support packages prepared according to the priorities of the sectors, with the step to be taken.
The ministry will provide affordable and accessible financing opportunities to increase the contribution of manufacturing SMEs to sustainable growth and strengthen their competitive power. In line with this, approximately TL 30 billion of credit will be provided to manufacturing SMEs with the new guarantee package prepared within the framework of the efforts to support the real sector.
Treasury and Finance Minister Mehmet Şimşek announced that they will put into effect a total of TL 25 billion of guarantee limited support package, TL 17.5 billion of which will be allocated for business and TL 7.5 billion for investment expenses through KGF.
Şimşek, in his remarks to AA, noted that the guarantee rate of the support package will be 85%, also explaining the eligibility conditions.
"We determined the upper credit limits per beneficiary as TL 15 million for operating expenses and TL 30 million for investment expenses. We will put the support package, the protocol phase of which has been completed, into use in a short time," he said.
Drawing attention to the importance of SMEs in the economy, Şimşek also highlighted their efforts to support them and their competitiveness.
"We continue to support the real sector with selective policies. While continuing our determined fight against inflation with the aim to maintain macroeconomic stability, we also, at the same time, closely follow the needs of the real sector," the minister said.
"In this respect, supporting our SMEs, the cornerstone of production and employment, is among our priorities," he added.
"We meticulously carry out our efforts to support financing opportunities to increase the contribution of our manufacturing SMEs to growth and their competitiveness. We will strengthen the power of our SMEs with affordable and accessible financing sources."
