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2.6 A draft law to expand the state credit guarantee fund
Erdogan’s parliamentary caucus deputy chairman, Mehmet Mus, said on February 18 that the move would translate into TRY175bn worth of fresh loans for SMEs when leveraged across the banking industry while Reuters quoted an unnamed official as estimating the upcoming credit impulse at TRY150-175bn.
The KGF was first deployed to stimulate the economy through the end of 2016 after the failed coup in July of that year that led to an economic downturn. Erdogan emerged from the turbulence laying down the law like never before. Such was the shot in the arm he ordered for the economy, it nearly blew the overheated limb off.
The initial TRY250bn worth of stimuli released to Turkey’s SMEs with KGF underpinning were partly responsible for pushing the lira out to an all-time low of 7.24 against the USD in August 2018.
Loan volumes under KGF guarantees rose to TRY372.5bn as of end-April 2019 from TRY317.3bn as of end-October 2018 while the figure stood at TRY394bn at end-2019, according to latest data available on the KGF’ body’s official website.
Lira loan growth reached 16% y/y as of February 7, the highest level recorded since July 2018. Annual lira loan growth hit 26% in November 2017 due to the credit guarantee fund commitment of TRY250bn.
Annual lira-denominated consumer loan growth moved up to 20% as of February 7 while lira-denominated SME loan growth stood at only 2% versus 11% in commercial loans.
2.7 Coup for who?
Erdogan's favourite song is "Beraber yürüdük biz bu yollarda/We've walked together on these roads". There was a time when he was only too willing to walk with Fethullah Gulen.
Newspaper columnists and officials in Turkey have since January addressed the possibility of a new coup attempt being mounted against President Recep Tayyip Erdogan. The controversy was triggered by a 276-page report from the California-headquartered US think tank RAND Corporation compiled for the US Army that started circulating in mid-January. RAND, which “started with one client—the U.S. Air Force” in 1948, entitled the analysis “Turkey's Nationalist Course”. Reading through it, the Turkey watcher gets the impression it was
9 TURKEY Country Report March 2020 www.intellinews.com
