Turkish government increases credit guarantee limits to boost SMEs
Turkish Finance Minister Mehmet Simsek has given instructions to raise the credit guarantee limits for Small and Medium-sized Enterprises (SMEs) within the framework of the credit guarantee system.
Simsek announced that the maximum credit guarantee limit per SME under the credit guarantee system will be increased. He stated, "The amount of credit a single SME can borrow through the system, which was previously capped at 100 million Turkish liras, will now be raised to 150 million Turkish liras."
Speaking to Turkey's state run Anadolu news agency, Minister Mehmet Simsek discussed the proposed adjustments to the credit guarantee mechanism for SMEs. He highlighted that changes to the SME definition were introduced through regulations published in the Official Gazette in May.
These changes involved revising the criteria for annual net sales revenue or financial statement values required for businesses to be classified as SMEs. Şimşek pointed out that these thresholds have been raised from a maximum of 5 million liras to 10 million for micro enterprises, from 50 million liras to 100 million for small enterprises, and from 250 million liras to 500 million for medium-sized enterprises. Şimşek also indicated that the Ministry plans to make amendments to the Decision on Treasury Support Provided to Credit Guarantee Institutions.
The purpose of these changes is to harmonize the provisions in the Decision with those in the regulations. Underlining the significance of SMEs in the country's production and employment landscape, Minister Şimşek stated that by increasing the limits within the SME definition, they are facilitating greater utilization of government support by these businesses. He further announced the intention to implement a similar adjustment for the credit guarantee support provided to credit guarantee institutions.
Minister Simsek emphasized that they have established a framework to support SMEs in various domains. He explained, "Through the adjustments we will make in the Decision, we are increasing the maximum credit guarantee limits per SME under the credit guarantee system. This move will enhance our companies' access to financing. Previously, a single SME could receive credit guarantee for up to 100 million liras through this system; now this amount will be raised to 150 million liras. For larger companies, the limit will increase from 350 million liras to 500 million liras." Şimşek further noted that the aforementioned Decision will enable both SMEs and larger non-SME corporations to benefit from higher credit guarantee opportunities. In addition to the Decision, Minister Şimşek mentioned that a temporary provision will be added. This provision will grant businesses newly included within the SME definition through the updated regulations the opportunity to benefit from the defined credit guarantee limits for non-SMEs until December 31, 2023. Şimşek concluded by affirming the government's commitment to continue taking necessary measures to optimize financing channels for SMEs and other businesses.