Turkish gov't support program to grant TL 734M to over 2,500 SMEs

Published 27.11.2018 23:37
Updated 28.11.2018 00:49

Some 2,545 enterprises in Turkey will be receiving around TL 734 million ($140.17 million) in financial support granted by the government through the Small and Medium-Sized Enterprises Development Support Program (KOBİGEL), Industry and Technology Minister Mustafa Varank announced yesterday.

"With this support, we aim to create a TL 1.5 billion project investment volume, thus, employing 6,055 new personnel," Varank said in a statement, announcing the results of KOBİGEL.

Varank stressed that Small and Medium Enterprises Development and Support Administration (KOSGEB) support will be used more effectively for the development of high-tech strategic products that will reduce the current account deficit within the framework of a soon-to-be-announced end-to-end indigenization program.

The end-to-end indigenization program aims at bringing down the current account deficit and the export of value-added products.

According to a report by the Organisation for Economic Co-operation and Development (OECD), small and medium-sized businesses (SMEs) play an important role in improving efficiency and diminishing inequalities, constituting more than 95 percent of all companies and providing 60-70 percent of employment in OECD member countries.

In Turkey, SMEs account for more than 99 percent of all businesses, 73 percent of employment, 53 percent of added value, 55 percent of total investments and 55 percent of exports, the OECD report shows.

Minister Varank further noted in his statement that KOSGEB continues its activities with the vision of "supporting SMEs making technology-based and value-added production and transforming them into actors capable of competing internationally."

The SME Development Support Program supports the projects of the enterprises in the context of "Designing and Implementing Regional, Sectoral and Entrepreneurial Support Model" included in the road map, Varank continued, explaining that KOBIGEL 2018 adopted an approach that takes into account the manufacturing industry potential of each province. Recalling that the theme of the 2018 project call for the program was specified as "Improving the Competitiveness of Manufacturing Industry Sectors and Software Sector with Competitive Advantage in Provinces," Varank said 4,512 project applications were received for the program, and that as a result of the evaluations, 2,545 enterprises were qualified for support, while the program budget was increased to TL 734.2 million in order to support all the enterprises passing the threshold.

"The upper limit of support per project was determined as TL 1 million, including TL 700,000 with reimbursement and TL 300,000 without. KOSGEB will also be able to pay an amount of 30 percent to be calculated over the eligible expenditure beforehand as collateral under prepayment," Varank noted.

Speaking of the 2,545 enterprises to receive support, the minister said Istanbul led the way among provinces with 297 projects, followed by the capital Ankara with 198, İzmir with 193, Konya with 165, Bursa with 159, Kayseri with 143 and Kocaeli with 100.

Varank informed the media that 82 percent, or TL 602 million, of the support will be used for the machinery-equipment expenses of the projects owners, 11 percent, or TL 80.8 million, for personal expenses and the remaining 7 percent, or TL 51.4 million, for software and service purchase expenses. Meanwhile, the state-owned bank that supports Turkish exporters Türk Eximbank's general manager, Adnan Yıldırım, said the SMEs, which have a share of 50 percent in the economy, have played a huge role in dodging crises.

Speaking at an event in Turkey's southeastern province of Gaziantep, Yıldırım said the number of exporters the bank is working with has neared 10,000. "We want to work with more SMEs because their share in our exports, production and employment is around 50 percent," Yıldırım said. Türk Eximbank is the eighth-largest bank in Turkey. It is the seventh-largest bank in the world providing support funds, according to Yıldırım.

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