Small enterprise finance in Turkey

Small and medium-sized enterprises in Turkey account for 99 percent of all enterprises, about 75 percent of employment, and more than 25 percent of value added. Nevertheless, their share of bank loans is less than 5 percent according to research. International organizations identified the insufficient funding by financial institutions as a major problem of SMEs in Turkey and an obstacle to Turkish economic growth in general. International researchers still address the insufficient external SME financing, but it seems to become apparent that the situation is improving. The thesis paper on hand questions former research statements and provides an updated analysis on SME financing by commercial banks in Turkey. Both, the current situation of SME financing based on research, and the results from a loan demand study as well as a new empirical supply study conducted by the author, are presented. Finally, conclusions are drawn and recommendations are given as a result of the joint analysis of all information gathered in the process of desk and field research.