Credit Guarantee Scheme and Small and Medium-Sized Enterprise Finance: The Case of Turkey
Yağcı, Mustafa | November 2018
Abstract
This study examines the recently revived credit guarantee fund (KGF) mechanism in Turkey from a comparative historical perspective and identifies the structural features of the Turkish economy that complicate access to finance for SMEs. The banking-based financial system in Turkey, state banks and the public sector, was unable to resolve the access to finance problem of SMEs in the near past. Consequently, the public authorities revived the KGF in early 2017. The KGF was established in 1993 but stayed idle until recently. Despite these efforts, structural impediments to easing SMEs’ access to finance persist in the Turkish economy. This paper identifies the chronic current account deficit, high inflation, large size of the informal economy, and bank-based financial system as the major structural obstacles to easing SMEs’ access to finance. Moreover, the global financial crisis has exacerbated the access to finance problem of Turkish SMEs. This paper posits that, for Turkey to resolve the financing problem of SMEs, it is necessary to identify clearly the sustainability of the recently revived KGF and its impact on public and private debt. In addition, the KGF mechanism needs to prioritize SME financing in value-added tradeable goods so that it can contribute to long-term, sustainable economic growth in Turkey.
Citation
Yağcı, Mustafa. 2018. Credit Guarantee Scheme and Small and Medium-Sized Enterprise Finance: The Case of Turkey. © Asian Development Bank Institute. http://hdl.handle.net/11540/9056.Keywords
Risk Financing
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Non Bank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Urbanization
Urban Services
Urban Projects
Urban Problems
Urban Poverty
Urban Policy
Urban Planning
Urban Infrastructure
Urban Health
Urban Government
Urban Economic Development
Urban Development Finance
Urban Development
Urban Conditions
Urban Communities
Urban Population
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Urban Plans
Urbanism
Urban agriculture
Economic Development
Rural Urban Migration
Cities
Migration
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
Local government
Urban renewal
Urban housing
Urban sociology
Transit systems
Rapid transit
Public transit
Mass transit
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