Turkey's 'Breath Loan' program provides $730 million in funding to export-oriented businesses under strict terms.
The Turkish government's "Nefes" (Breath) Loan program, launched in July 2023, provides a lifeline for Small and Medium Enterprises (SMEs) in Turkey, offering low-cost loans to export-focused businesses amidst high commercial lending rates.
Each eligible SME can access up to ₺2.5 million ($61,358) in credit under the program, with a maximum loan term of 36 months, including a six-month grace period. The program, supported by the Credit Guarantee Fund's own resources and eight participating banks, has already granted ₺30 billion ($736.4 million) to 23,515 companies.
Recently, the government expanded SME eligibility for the program by raising the maximum balance sheet threshold to ₺1 billion ($24.5 million). This move aims to widen access to the low-cost loans beyond the previous SME criteria.
The Union of Chambers and Commodity Exchanges of Türkiye (TOBB) has formally requested an increase in the loan ceiling above ₺2.5 million, indicating that if approved, more funds could be allocated quickly to eligible SMEs.
TOBB emphasizes the importance of affordable financing for maintaining production and trade continuity in Turkey. Greater access to credit means more investment, production, employment, and exports, ultimately supporting a stronger economy, according to TOBB.
Since 2009, the Credit Guarantee Fund has provided ₺950 billion ($27.8 billion) in guarantees to Turkish businesses. The "Nefes" credit loan program is part of the government's efforts to ease financing constraints for SMEs in export-focused sectors and promote production, trade continuity, and exports.
The program aims to reach as many eligible SMEs as possible within a short application period. If approved, additional funds could be made available rapidly for the "Nefes" credit loan program, providing much-needed relief to SMEs in Türkiye.
[1] Source: TOBB Press Release, Date: August 15, 2023.
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