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					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
              Impact of global crisis in Turkey
    Trend of some economic indicators
   during period of 2005 – 2008
                                   2005 2006 2007     2008
GDP (Billion USD)                   484 531 656 800 (Est.)
GDP growth (annual %)                8,4 6,9 4,6   3 (Est.)
Import (Billion USD)                  74  86 107        132
Unemployment rate (%)              10,3  9,9 9,9       10,3
Manufacturing industry               8,2 8,4 5,6 3,2 (Sept.)
growth rate (%)
Percent of GDP covered by              21         20    20 19 (Sept.)
manufacturing industry
USD / Turkish Lira                    1,3         1,3   1,4       1,2
          2
                              Current USD / TRL ratio: 1,7
             Impact of global crisis in Turkey


   Turkish manufacturing sector hit by
  financial crisis

Manufacturing industry sector               2008      2009
indicators (2008 – 2009)
Change in production index                  % 12      % -21
(monthly_ January)
Capacity utilization ratio (Private         % 79      % 64
sector, monthly_ February)
Firms established / closed down             925 / 192 562 / 189
(monthly_February)
Revenue index                               137       121
(monthly_January)
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             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
         4
                 Spesific measures taken by Turkish Government for SME
                 and entrepreneurship financing
   Spesific measures related to real sector
    KOSGEB‟s spesific support measure developped for
   reducing impact of crisis on SME‟s
       Credit interest support for SME‟s: “0” or reduced
       interest credits for investment, import and operating
       In this support tool SME‟s 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
 agreement                 KOSGEB                     SMEs         BANKS
for benefit of
    SMEs               credit
                      interest                                         credit
       Credit                                                          capital
                                              Registered SMEs
     Guarantee
            5
                       Guarantee up to 80 %
       Fund             of credit with very
                                                KOSGEB Database
                         low commissions
           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
       6



   reduced by 25 %
             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
         7



    exempt from tax
             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


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             Recommendations


Recommendations for governments
 First of all, moral support should‟nt 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
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encouraged

				
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