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President Recep Tayyip Erdogan announced a ₺1 trillion ($21.3 billion) financing package for manufacturers on Monday, expanding support for investment and working capital as companies grapple with tight financial conditions.
Speaking after the Cabinet meeting, Erdogan said the government is increasing the budget of the Investment Commitment Advance Loan Program (YTAK), which provides advance financing for eligible industrial investment projects, to ₺750 billion while launching a separate ₺250 billion low-cost credit package for the manufacturing industry.
The new YTAK framework will operate under eligibility criteria to be announced by the Industry and Technology Ministry. Under the program, eligible manufacturers will apply through participating banks for government-backed financing to support strategic industrial investments.
Loans will carry a six-month grace period on principal repayments and maturities of up to 36 months, while the government will subsidize borrowing costs by covering 12 percentage points of the financing rate.
The financing came as Türkiye stepped up efforts to provide accessible and affordable funding to the manufacturing sector, which remains the backbone of the country's export-oriented industry.
Financial conditions tightened further after the war in Iran began, prompting the Central Bank of the Republic of Türkiye (CBRT) to raise its effective funding rate to 40% and introduce new macroprudential measures that further curbed commercial lending.
The bank lowered the monthly loan growth cap for Turkish lira loans extended to small and medium-sized enterprises (SMEs) to 4.5% from 5%, while reducing the cap for non-SME business loans to 2% from 3%. Hence, the average Turkish lira commercial loan rate rose above 50% as of the first week of July, according to central bank data.
The tight financial conditions were also reflected in first-quarter growth, with the manufacturing sector contracting 1.4% while the economy as a whole expanded 2.5% year over year.
In addition to introducing a ₺100 billion financing package earlier this year, the government also relaunched the Nefes (meaning "Breath" in Turkish) Credit program with a ₺25 billion lending volume after raising the program's size to ₺50 billion last year.
Business organizations welcomed the expanded support, arguing that easier access to financing could strengthen production and exports.
Istanbul Chamber of Commerce (ICOC) President Sekib Avdagic described the broader YTAK program as an important step for the Turkish economy. He argued that the loans would reinforce the supply side by boosting production and exports while supporting the fight against inflation.
"The government is responding to manufacturers' expectations by taking a positive step to strengthen the manufacturing industry, the main locomotive of our industrial sector," Avdagic said. "As the ICOC, we have also stressed that medium-sized companies should benefit more from the opportunities offered under the YTAK Program."
Avdagic also called for the new ₺250 billion credit package to be implemented quickly so manufacturers can move ahead with investment plans.
Istanbul Chamber of Industry (ISO) Chair Erdal Bahcivan welcomed the package, recalling that manufacturers had recently called for an urgent industrial financing program. He described the announcement as an encouraging step that demonstrates support for production, investment, employment, and export capacity.
Bahcivan added that manufacturers have been facing mounting challenges ranging from limited access to financing and high borrowing costs to global competition and regional risks, making the new support package particularly significant for the sector.
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