Economic context

In Turkey, access to finance for SMEs has improved over the last years, supported by extensive government-led programmes to provide guarantees and interest rate subsidies. The most recent EBRD-World Bank Business Environment and Enterprise Performance Survey (BEEPS V), showed that Turkish firms had the lowest level of credit constraints in the EBRD region. However, access to finance in less-developed regions of Turkey may be more constrained.

A significant share of small firms – over 40 per cent – obtain international certification. But with regards to innovation and financial management there is room for improvement. Only 5 per cent of SMEs report being engaged in product innovation in Turkey, less than half the average for south-eastern Europe. Yet, among those Turkish SMEs that do innovate, a higher percentage of firms introduce products or processes that are new to the country or to international markets.

Better skills in financial and business management could also help the development of SMEs. Currently just under a quarter of the adult population is financially literate – a level below those of Turkey’s western neighbours and below the average for the EBRD region.

Providing tailor-made finance

In 2017, we provided €13 million in direct financing to SME clients in Turkey and provided over €173 million through partner financial institutions alone. We offer customised finance directly to dynamic, fast-growing SMEs in regions that are underserved by the financial sector – businesses that we believe have great potential to drive employment, innovation and growth. In addition to tailoring this finance to their needs, we help strengthen companies as they implement the investment through our advisory work. Our assistance helps promote good corporate governance, financial management and other standards that help these enterprises to stand out.

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We also enable SMEs to access business advice, with a focus on underdeveloped areas in southern and eastern Turkey. Firms work with local consultants and international advisers in areas such as strategy, financial management, quality management and international certification to improve their operations, become more competitive and grow. During 2017, we undertook a total of 142 such advisory projects in Turkey, including those under our Women in Business programme.

Before and after investment, our business advice helps to build value within each enterprise.

Promoting women in business

The EBRD’s Women in Business programmes promote entrepreneurship and participation in business by enabling women-led SMEs to access the finance and know-how they need to grow.

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Launched in 2014, our Women in Business programme in Turkey has provided €300 million in finance to date through our partner banks in the country, which have provided more than 18,000 loans to women-led SMEs. We have also helped over 340 such firms to obtain business advice, alongside providing more than 3,000 women entrepreneurs with mentoring, our online diagnostic tool Business Lens, training and networking opportunities.

Supporting refugee-hosting communities

Support for the private sector and SMEs is a core part of the EBRD’s response to the refugee crisis in Turkey. This work began in 2016 and aims to improve the economic resilience of communities most affected by the crisis, providing financing to the private sector both directly and through our partner financial institutions.

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We also help SMEs in these communities access advice to strengthen them in a challenging business environment. Moreover, we have started a capacity-building project with the Gaziantep Chamber of Commerce, boosting its ability to support its members and enterprises within the Gaziantep community that are led by refugees.