Gov’t defers loan repayments of $5.8 billion for second time

Gov’t defers loan repayments of $5.8 billion for second time

Aysel Alp - ANKARA
Gov’t defers loan repayments of $5.8 billion for second time

The Turkish government has decided to defer the loan repayments of nearly 600,000 businesses from a state-owned bank totaling about 40 billion Turkish Liras ($5.8 billion).

“You keep working, we’ll support you,” Treasury and Finance Minister Berat Albayrak said in a tweet, announcing the three-month deferment decision and thanking the business owners for shutting down their shops during the peak of the pandemic between mid-March and June 1.

According to a presidential decree announcing the decision, business owners are supposed to make a commitment not to lay off any employees for four years in order to benefit from deferment option for credits taken from Halkbank. An annual interest rate of 4 percent will be applied for a deferment.

On March 25, shortly after first anti-pandemic were introduced, the government had deferred loan repayments of April and June without applying any interest rate.

“We have survived with lifeline loans. The new loan repayment deferral comes with a commitment not to fire anyone, and that corresponds to at least 600,000 employees,” said Abdülkadir Akgül, chair of the largest credit and guarantee cooperative TEKSOMB.

“After all, there has been a recovery in most of the businesses,” he added, recalling that some 700,000 shop owners were also granted loans up to 25,000 Turkish Liras ($3,650), nearly 17 billion liras ($2.4 billion) in total.

Meanwhile, the Turkish parliament approved a legislation authorizing President Recep Tayyip Erdoğan to extend a short-term working scheme and a layoff ban for periods of three to six months overall, or in some specific sectors, until June 30, 2021.

Under the short-term employment allowance scheme, the Unemployment Insurance Fund will continue paying 60 percent of the staff salaries of the employees when a business cuts work hours. More than 3 million workers were paid short-term allowance since March.

The government is also paying a daily allowance of 39.2 liras ($5.7) for a period of three months to workers forced to take unpaid leave.

Turkey, debt, economy,