Jan 10 2019

Turkey provides $3.7 billion in loans to businesses with bank deal

Turkey’s government said 13 of the nation’s banks have agreed to provide 20 billion liras ($3.7 billion) in loans with preferential conditions to small and medium-sized enterprises.

A total of 40,000 companies can benefit from the deal, which will involve a six-month grace period on repayment of between 500,00 liras and 1 million liras, Treasury and Finance Minister Berat Albayrak said, according to Dünya newspaper. The firms must have an annual turnover of less than 25 million liras to qualify.

Interest rate on the loans will be 1.54 percent monthly, below market rates. Albayrak said the plans were drawn up by the banks on their own initiative. Banks are currently lending up to 1 million liras over five years to clients at interest rates of between 2.7 percent and 3.8 percent per month, according to the best deals featured on online loan broker hangikredi.com.

Turkey is seeking the means to improve the finances of its firms after a currency crisis last year led to a severe economic slowdown. The government is facing nationwide local elections on March 31. The economy contracted by a quarterly 1.1 percent in the three months to September and inflation has accelerated to the highest levels in a decade and a half.