Loans to SMEs increase by $28 billion in 8 months

Loans to SMEs increase by $28 billion in 8 months

ANKARA- Anadolu Agency
Loans to SMEs increase by $28 billion in 8 months

Loans extended by local lenders to Turkey’s small and medium-sized enterprises (SMEs) surged by 223 billion Turkish Liras ($28 billion) in the first eight months of the year, Anadolu Agency reported, citing data from the banking regulator BDDK.

The COVID-19 pandemic hits SMEs hardest, prompting the government to take a series of actions to support those companies to help overcome the economic impact of the outbreak.

SMEs in Turkey account for nearly two-thirds of all employment, around 50 percent of exports with some 65 percent of turnover generated and one-third of imports.

The loans provided to SMEs stood at 611 billion liras at the end of 2018 and rose by 4 billion liras to hit 615 billion in the year 2019, according to data from the BDDK.

In the first quarter of 2020, credits to SMEs had increased by another 47.2 billion liras. In the second quarter, when the impact of the COVID-19 pandemic on economic activity had become more visible, small and medium-sized companies had much easier access to loans. In this quarter, loans to those enterprises have jumped nearly 100 percent.

In the first half of 2020, bank lending to SMEs had increased by some 193 billion liras.

In April alone, when the government rolled out financial support programs, loans to small and medium-sized companies rose by 100 billion liras. However, the pace of growth in SMEs loans lost steam in the third quarter after authorities started to implement monetary tightening policies.

In January-August, loans to SMEs increased by nearly 223 billion liras, which brought the total loan volume to those enterprises to 838 billion liras by the end of August.