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The Turkish government has rolled out a ₺100 billion ($2.29 billion) financing package to boost the manufacturing sector, with tight credit conditions still weighing on production.
President Recep Tayyip Erdogan announced the plan on Monday, saying it would offer easier loan terms for industrial businesses.
The package, to be delivered through state banks and backed by the Credit Guarantee Fund (CGF), includes a six-month grace period, loan terms of up to 36 months, and below-market interest rates, with limits of up to ₺50 million ($1.14 million) depending on workforce size.
As part of the initiative, support for small and medium-sized enterprises (SMEs) will include an interest subsidy backed by the Small and Medium Enterprises Development Organization (KOSGEB), a public agency under the Industry and Technology Ministry that provides financial and technical assistance to help SMEs grow and stay competitive.
The program is expected to provide much-needed relief for manufacturers that have delayed investment or working capital needs due to high financing costs.
SMEs play a key role in Türkiye’s economy, contributing around 30% of the country’s $273.4 billion in 2025 exports, with manufactured goods accounting for 95% of the total.
The manufacturing sector, one of the most financing-dependent industries, has been under pressure from high interest rates and limited loan access, as credit growth remains capped by the Turkish central bank under its disinflation policy.
Despite an ongoing easing cycle that has brought the policy rate down to 37% from 46% since July 2025, weighted average rates on Turkish lira commercial loans have remained above 50% since late 2023, with credit growth limits set at 2.5% for SMEs and 1.5% for other commercial loans.
The government’s move follows the "Nefes" (meaning "breath" in Turkish) support scheme rolled out in 2025 for SMEs, which reached a total volume of ₺50 billion.
Most recently, the Industry and Technology Ministry introduced a refinancing package totaling ₺30 billion, offering SMEs loan guarantees of up to ₺10 million, maturities of up to 48 months, and an annual cost of 36% to restructure existing debt.
Commenting on the program, Istanbul Chamber of Commerce (ICOC) Chairman Sekib Avdagic told state-run Anadolu Agency that the support package aligns with the expectations of the business community and reflects the Chamber’s long-standing recommendations.
“Firms that preserve employment and steadily grow output deserve preferential treatment," Avdagic said. "That’s why we view performance-based lending limits as a smart way to ensure efficient use of national resources."
The CGF, a public-private partnership in Türkiye, provides loan guarantees to businesses, particularly SMEs, to ease access to financing under tight credit conditions. As of the week ending Jan. 23, it had guaranteed ₺801.5 billion in commercial loans, out of a total loan volume of ₺950 billion.
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