Page 63 - TURKRptJun19

8.1.2 Loans
Refuelling the KGF. As part of the non-stop pre-Istanbul rerun stimulus programme, the government is also refuelling the credit guarantee fund (KGF). Accordingly, the KGF will provide 80%-guarantees for small and medium sized enterprises (SMEs) on fresh loan lines of up to TRY500mn with maturities of 30-60 months and a 12-month grace period. Akbank, Garanti Bank, Isbank, TEB, QNB Finansbank, Vakifbank, Denizbank, Sekerbank, Ziraat Bank, Yapı Kredi Bank and Ziraat Participation Bank will provide fresh loans under KGF guarantees. The KGF provided TRY250bn worth of stimuli to Turkey’s SMEs in 2017 without conducting audits. There was speculation that craftsmen subsequently bought yachts or earned interest or bought dollars with the cheap loans obtained under the KGF programme. Loan volumes under KGF guarantees rose to TRY372.5bn as of end-April from TRY317.3bn as of end- October, according to the latest data available on the KGF’s official website. The KGF had TRY318.3bn of capital at end-2018 while the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the Small and Medium Enterprises Development and Support Administration (KOSGEB) had the largest KGF stakes of 29.2% each, according to the fund’s latest activity report. Some 27 local lenders each had a KGF stake of 1.54% with each bank’s participation amounting to TRY4.9bn.
“The main question I got is whether state banks will be used again to boost growth ahead of June 23. I think the credit channel is close to exhausted, though data are ambiguous. Last week of April saw a jump in state bank lending & private credit...,” Robin Brooks of IIF said on May 7 in a tweet.
63 TURKEY Country Report June 2019 www.intellinews.com