January 19, 2023
Treasury and Finance of Republic of Türkiye Minister Nureddin Nebati has unveiled details of 250 billion Turkish Liras ($13 billion) in financing support to be provided to businesses under the Credit Guarantee Fund (KGF).
The support will be given under 14 packages to a wide range of businesses, including manufacturing companies, women entrepreneurs, exporters, private schools and real estate firms.
“We identified the needs of companies in each sector. Companies are classified under five groups based on their financial strength, debt repayment history, and collateral needs,” Nebati said at a press meeting in Istanbul on Jan. 11.
The package is designed to make the credit guarantee facility more efficient to help companies, particularly small and medium-sized companies, access financing, the minister added.
Companies with strong creditworthiness, which do not have collateral problems and are classified in the first group, or businesses with weak creditworthiness, classified in the fifth group, will not be entitled to the financing offered under the scheme, Nebati said.
Some 60 percent of the financing will go to the companies in the third group, 30 percent to those in the second group and 10 percent to businesses classified in the fourth group, he added.
The authorities will monitor companies to prevent the misuse of the funds and a blacklist will be drawn. “Companies who violate the rules will never be able to benefit from the KGF.”
Under the package, some 35 billion liras will be provided to companies to help them meet operating costs, another 20 billion liras will be offered as investment project financing support.
Companies that will pay severance pay to their retiring personnel under the new retirement scheme, EYT, will also benefit from the package. Those companies will receive 25 billion liras.
The government also allocated 35 billion liras to support businesses that engage in exports, while the manufacturing sector will get 15 billion liras.
Women entrepreneurs will receive 4 billion liras, while tech companies will get another 4 billion liras. Private schools, which have financial difficulties will be given 10 billion liras. The government is also providing 20 billion liras of financing under the “My New House” program to help middle-income groups buy a house.
Source: Hürriyet Daily News
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