Turkey - Improving Conditions for SME Growth Finance and Innovation

Facilitating the growth of Small- and Medium-sized Enterprises (SMEs) is central to creating jobs for an underutilized and growing labor force in Turkey as SMEs account for 79 percent of jobs in Turkey. Creating jobs for Turkey's unemployed and for the rapidly growing labor force, though partly a social challenge, is an important economic opportunity. Turkish SME growth performance and productivity is currently poor, and these related challenges must be simultaneously addressed. First, Turkish SMEs grow slower than both large enterprises in Turkey and SMEs in comparator countries. Second, not only are SMEs in Turkey less productive than larger firms, but the gap across firm size is larger in Turkey than in other countries. Although growth and productivity may be affected by different aspects of the business environment, productivity is needed for firms to be competitive and thus be able to sustain growth in the long term. Therefore, growth and productivity must be simultaneously addressed to enable the sustainable creation of well paying jobs. The two main priorities for SMEs are: a) access to finance, and b) the ability to adopt and use technology and to innovate, and this report addresses these topics. The main constraint for the growth of SMEs is access to finance, and new microeconomic evidence shows that the development of medium term finance contributes significantly to SME performance in terms of employment, sales, and investment. Specific interventions in the form of credit guarantees and credit line financing of financial institutions dedicated to support SME financial products have been used to speed up the development of the SME medium term credit market, and they may continue to play a role.

Bibliographic Details

Main Author:	World Bank
Format:	Policy Note biblioteca
Language:	English en_US
Published:	Washington, DC 2011-08
Subjects:	ACCESS TO CREDIT, ACCESS TO FINANCE, ACCOUNTS RECEIVABLE, ADVANCED ECONOMIES, AGRICULTURAL SECTOR, AGRICULTURAL SECTORS, ASYMMETRIC INFORMATION, BALANCE SHEET, BANK COMPETITION, BANK CREDIT, BANK CUSTOMERS, BANK FINANCING, BANK LOAN, BANK LOANS, BANKRUPTCY, BANKRUPTCY LAW, BANKS, BARRIER TO FINANCE, BIASES, BOND MARKET, BOND MARKETS, BORROWER, BORROWING, BUSINESS ACTIVITIES, BUSINESS INCUBATORS, BUSINESS PLAN, BUSINESS PLANS, BUSINESS RISKS, BUSINESS SUPPORT, CAPACITY BUILDING, CAPITAL ADEQUACY, CAPITAL CONSTRAINTS, CAPITAL FINANCE, CAPITAL MARKET, CAPITAL MARKETS, CASH FLOWS, CENTRAL BANK, COLLATERAL, COLLATERALS, COMMERCIAL BANKS, COMMODITY EXCHANGES, CONSUMER CREDIT, CONSUMER FINANCE, CORPORATE BOND, CORPORATE BOND MARKET, CORPORATE BOND MARKETS, CORRUPTION, CREDIT BUREAU, CREDIT BUREAUS, CREDIT CARD, CREDIT GUARANTEE, CREDIT GUARANTEES, CREDIT HISTORIES, CREDIT HISTORY, CREDIT INFORMATION, CREDIT LINE, CREDIT LINES, CREDIT MARKET, CREDIT MARKETS, CREDIT RATIONING, CREDIT REGISTRIES, CREDIT REGISTRY, CREDIT REPORTS, CREDIT RISK, CREDIT SCORES, CREDIT SCORING, CREDITOR, CREDITORS, CREDITWORTHINESS, DEBT, DEBT COLLECTION, DEBT SECURITIES, DEBTORS, DEBTS, DEMAND FOR CREDIT, DEPOSIT, DEPOSITS, DEVELOPMENT BANK, DEVELOPMENT OF FINANCE, DOMESTIC CORPORATE BOND, ECONOMIC COOPERATION, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC OPPORTUNITY, ECONOMIC POLICY, EMPLOYEE, EMPLOYMENT GROWTH, ENFORCEMENT MECHANISMS, ENTERPRISE CREDIT, ENTERPRISE PERFORMANCE, EQUALITY, EQUITY CAPITAL, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXTERNAL CAPITAL, EXTERNAL FINANCE, FINANCE COMPANIES, FINANCIAL DEVELOPMENT, FINANCIAL INFORMATION, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARIES, FINANCIAL LIABILITIES, FINANCIAL PRODUCTS, FINANCIAL SECTOR ASSESSMENT, FINANCIAL SECTOR DEVELOPMENT, FINANCIAL SYSTEM, FISCAL DEFICIT, FISCAL DEFICITS, FIXED COSTS, FORECLOSURE, FOREIGN CURRENCIES, FOREIGN CURRENCY, FORM OF CREDIT, FORMS OF COLLATERAL, GENDER, GOOD CREDIT, GROSS DOMESTIC PRODUCT, GROUP OF FIRMS, GUARANTEE FUND, GUARANTEE SCHEME, GUARANTEE SCHEMES, GUARANTORS, HIGH INTEREST RATE, INDICATORS OF ACCESS, INFLATION, INFORMAL ECONOMY, INFORMATION ASYMMETRIES, INFORMATION ASYMMETRY, INFORMATION SHARING, INSTITUTIONAL INVESTORS, INSTRUMENT, INTELLECTUAL PROPERTY, INTEREST RATE, INTEREST RATES, INTERNATIONAL FINANCIAL STATISTICS, INVESTMENT CLIMATE, INVESTMENT DECISIONS, INVESTMENT FINANCE, INVESTMENT PLANS, JOB CREATION, JOB OPPORTUNITIES, KEY CHALLENGE, LABOR FORCE PARTICIPATION, LABOR MARKET, LEGAL FRAMEWORK, LEGAL RIGHTS, LENDER, LENDERS, LINE OF CREDIT, LIQUIDITY, LIQUIDITY RISK, LIQUIDITY RISKS, LOAN, LOAN AMOUNTS, LOAN APPROVAL, LOAN APPROVAL PROCESS, LOAN FUNDS, LOAN SIZE, LOANS TO ENTERPRISES, LOCAL CURRENCY, MACROECONOMIC POLICY, MARKET DEVELOPMENT, MATURITY, MEDIUM TERM BONDS, MICRO ENTERPRISES, MONETARY FUND, MORAL HAZARD, MOVABLE COLLATERAL, NEW BUSINESS, NEW MARKETS, NOMINAL INTEREST RATE, OBSTACLES TO GROWTH, OUTREACH, PAYMENT HISTORY, PAYMENT SERVICES, PENSION FUNDS, PERSONAL ASSETS, PLEDGES, PORTFOLIO, PRIVATE CREDIT, PRIVATE INVESTMENTS, PRODUCTION CAPACITY, PROFITABILITY, PROPERTY RIGHTS, PUBLIC BANKS, PUBLIC CREDIT, REAL ESTATE, REAL ESTATES, REAL INTEREST, REAL INTEREST RATE, RECESSION, REGISTRATION SYSTEMS, REPAYMENT, RISK MANAGEMENT, RISK OF DEFAULT, RISKY BORROWERS, SALES GROWTH, SAVINGS, SAVINGS RATE, SMALL ENTERPRISE, SMALL ENTERPRISES, SMALL LOAN, SOCIAL SECURITY, SOLVENCY, STOCK EXCHANGE, SUPPLY OF CREDIT, T-BILL, T-BILL RATE, TAX, TECHNICAL ASSISTANCE, TERM CREDIT, TRANSACTION, TRANSACTION COSTS, TRANSACTIONS COST, TRANSACTIONS SYSTEMS, TRANSPARENCY, TREASURY, TURNOVER, UNEMPLOYMENT, UNION, VENTURE CAPITAL, VENTURE CAPITAL INVESTMENT, WOMAN, WOMAN ENTREPRENEUR, WORKING CAPITAL,
Online Access:	http://documents.worldbank.org/curated/en/2011/08/17068912/turkey-improving-conditions-sme-growth-finance-innovation http://hdl.handle.net/10986/12211
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