The total amount of cash loans the Turkish banking sector provided to microenterprises as of August-end soared by 41.4% compared with the end of last year to TL 254.8 billion ($31.24 billion), official data showed.
The loan balance of the microenterprises, which account for more than 80% of small- and medium-sized enterprises (SMEs), was up from TL 180.2 billion at the end of 2019, according to the data by Banking Regulation and Supervision Agency (BDDK).
It came amid support by the government and related institutions for pandemic hit-SMEs to continue their activities and continue contributing to production, exports and employment amid the coronavirus pandemic.
Loans provided to the SMEs surged by TL 222.5 billion from January through September, according to BDDK. The balance of the SME loans increased to TL 837.9 billion, the data showed.
While 30.4% of total SME loans were provided to the microenterprises, the rate has maintained an upward trend over the last two years.
In 2018, 28.3% of total SME loans were made to micro-businesses, while at the end of last year, this figure rose to 29.3%.
The number of companies using SME loans from January through September this year also posted a noteworthy rise of over 600,000 firms as the figure jumped to 3.2 million, up from 2.6 million.
The loan amount provided to small enterprises reached TL 269.4 billion as of the end of August, and the loan balance of medium-sized enterprises reached TL 313.7 billion.
Turkey put forth multiple support packages and applications for the business during the pandemic period. Among these was a relief package, which the government announced in March, that offered salary support, postponed loans and provided flexibility for taxpayers.
The country’s lenders, mainly the public ones, also extended loan incentive schemes to invigorate the normalization transition.
Ziraat Bank, Halkbank and VakıfBank on Monday announced they have put into force another financial support package to ease the cost burden on enterprises and support cash flow.
They are offering SMEs financing of up to TL 100,000 ($12,364) through the Micro Enterprises Support Package, they said in a joint statement.
The lenders said the support package is aimed at meeting the financing and basic costs of the SMEs, especially salary and rent payments, as well as providing cash support to protect the cash flow between their suppliers.
In June they offered loan packages, including mortgages for new houses, loans for vehicle purchases, locally manufactured goods and holiday expenses.