Turkey preparing pre-election financing for businesses

Turkey’s government is readying another package of financing for businesses ahead of elections scheduled for June.

Treasury and Finance Minister Nureddin Nebati said the package would support the needs of small and medium-sized enterprises that suffered from a lack of capital.

The financial package would be introduced in line with the government’s economic model, which prioritised production, exports and employment, Nebati said on Twitter late on Tuesday.

“The Treasury-supported bailout package is designed with the understanding that SMEs are the engine of our economy,” he said. Its terms and conditions would be made available to the public after technical studies are completed, he said.

Cheap loans will be distributed via the government’s Credit Guarantee Fund (KGF), Bloomberg reported earlier on Tuesday citing a person familiar with the matter. The government disclosed the plans at a closed-door meeting chaired by Nebati, the person said.

Turkey has underwritten tens of billions of dollars of loans through the KGF by taking some of the risk of lending away from commercial banks and under Treasury guarantee. It has used the facility during the COVID-19 pandemic and recent bouts of currency turmoil to bolster growth in the $830 billion economy, which grew by an annual 7.6 percent in the second quarter.

President Recep Tayyip Erdoğan and his governing Justice and Development Party (AKP) have suffered from a decline in public support ahead of the presidential and parliamentary elections, emboldening and helping to unite a fractured opposition.

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