Turkish gov't to provide interest-free loans instead of grants

Published 25.04.2016 23:49

Deputy Prime Minister Lütfü Elvan announced that the government would rearrange state support for various sectors, from agriculture to trade. Stating that restructuring was underway to increase the productivity of the real sector and encourage investments, Elvan said that they wanted to move toward "an attractive, interest-free loan system instead of grants." "We wish to turn the grants into interest-free loans within the near future. There has been some misconduct regarding grants, so we can increase the support we provide by a factor of 10, making use of TL 1 billion ($350 million) instead of TL 100 million. We want to pass from grants to attractive loan programs." Elvan said.

Small business-owners are our priority

Providing nearly TL 133 billion of social help over the past 13 years and supporting farmers with nearly TL 70 billion worth of grants, the government has been conducting a comprehensive project to reform state support. Infrastructure work regarding data collection and observation will be completed within the year. Small and mid-sized enterprises (SMEs), responsible for systematic development in the field of productivity will be provided with state support with priority. The industries with high added-value will be taken into consideration. In the near term, an investment support program is being established for middle and advanced technological products, and new steps are being taken in order to increase the labor force and tax initiatives, provide cash for entrepreneurs and reserve more resources for energy investments. Speaking to Sabah daily, Elvan said that they put the economy at the center of the reforms and added that they have been conducting a comprehensive project in order to increase production and employment while easing the financial burden on firms.

Explaining that the state provides grant support in many areas, Elvan said that due to some misconduct that has occurred, moving toward an interest-free or low-interest loan mechanism from grants would create more productive results.

Development agencies to activate

Soon development agencies will take an active role in state support. The support tools will also be diversified. In this context, interest support and interest-free loan support - which have not yet been implemented despite their inclusion in legislation will be added to the financial support of the development agencies. All of them will be used as grants by the development agencies. Special supports will be provided at the regional level. Work related to providing regional venture capital has been ramped up as well. Beginning initially as a pilot project, the 10 percent allocated for the current support budget is planned for transfer to the venture capital fund.

'Terror' tracking for state support

The support provided through development agencies in the eastern and southeastern Anatolian regions have been closely monitored. Names and management found to have close ties to terrorist organizations will be prevented from accessing the state support. To whom the support is provided, whether their reasons are justified or not and if they have connections with any terrorist organizations will also be determined. A fresh restructuring is ongoing for the correct usage of the TL 3.2 billion being transferred to development agencies. A total of TL 3.2 billion - TL 2.2 billion of central budget and TL 1 billion of local share have been transferred so far to the development agencies since their establishment. This year TL 496.3 million will be transferred as well. Since 2008, TL 2.7 billion worth has been allocated to 14,000 aid applications out of a total of 51,000.

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