Slayt 1

1
Impact of global crisis in Turkey and measures
taken by Turkish Government for SME and
entrepreneurship financing
Bayram MECIT Vice President KOSGEB Small and
Medium Industry Development Organization of
Turkey 27 March 2009, Turin
2
Impact of global crisis in Turkey

• Trend of some economic indicators during period
  of 2005 2008

3
Impact of global crisis in Turkey

• Turkish manufacturing sector hit by financial
  crisis

4
Spesific measures taken by Turkish Government for
SME and entrepreneurship financing

• Spesific measures related to financial sector
• Witholding tax applied to stock exchange
  investors (10) abolished
• Dividend distribution of banks is subject to
  discretion of Banking Regulation and Supervision
  Agency
• Measures taken by Central Bank of Republic of
  Turkey
• - Reduction of interests
• - Operation limits of banks abolished

5
Spesific measures taken by Turkish Government for
SME and entrepreneurship financing

• Spesific measures related to real sector
• KOSGEBs spesific support measure developped for
  reducing impact of crisis on SMEs
• Credit interest support for SMEs 0 or reduced
  interest credits for investment, import and
  operating
• In this support tool SMEs can receive up to
  300.000 TRL (app. 180.000 USD) credit for each
  credit program with optimized conditions for SMEs
• Whole or main part of the interest is paid by
  KOSGEB if the SME has been registered to KOSGEB
  Database

agreement for benefit of SMEs
KOSGEB
BANKS
agreement for benefit of SMEs
credit interest
Registered SMEs KOSGEB Database
credit capital
Credit Guarantee Fund
Guarantee up to 80 of credit with very low
commissions
6
Spesific measures taken by Turkish Government for
SME and entrepreneurship financing

• Spesific measures related to real sector
• Amendment of KOSGEB law
• Present target group of KOSGEB SMEs in
  manufacturing industry
• New target group of KOSGEB will be SMEs in all
  sectors
• Employment package
• - Obligatory employment rescinded
• - Social security payment debts will be delayed
• - Interest rate applied to social security
  payments reduced by 85
• - Share of employers in social security payments
  reduced by 25

7
Spesific measures taken by Turkish Government for
SME and entrepreneurship financing

• Spesific measures related to real sector
• Wealth reconciliation law
• Opportunity to insert wealth into registired
  economy with a symbolic tax of 2 without any
  question on origin of the wealth
• Recording forgiveness law
• Recordings about individual credits, credit
  cards, bad cheques will be deleted
• Accrual taxes delayed 18 months by 3 interest
• Investment tax credit
• Council of Ministers is entitled to make decision
  to determine cities in which 25 of investment
  will be exempt from tax

8
Spesific measures taken by Turkish Government for
SME and entrepreneurship financing

• Spesific measures related to real sector
• Taxes on textiles and clothing manufacturers
  will be reduced if they move their plants to
  certain cities.
• VAT for new dwellings s reduced
• Private consumption tax for vehicles and
  durable house goods and electronics is reduced

9
Recommendations

• Recommendations for governments
• First of all, moral support shouldnt be
  forgotton
• Low interest credit programs should be executed
• Charges and commissions for credit assesment
  process should be reduced
• Measures should be taken for conservation of
  employment
• Balanced consumption should be encouraged to
  gain domestic demand
• Cooperation between small enterprises and
  clustering should be encouraged
• Professional financial management in SMEs should
  be encouraged