SME Development Issues from SME Perspective Dr. Özer Balkız Deputy Secretary General MÜSİAD Turkey February 13, 2017

Outline of the Presentation Importance of the SMEs for the economies Expectations of SMEs about financing Activities related to SMEs by MÜSİAD SMEs’ assessments for the year 2016 SMEs’ expectations for the year 2017 About MÜSİAD Problems confronted by SMEs Conclusion

Importance of the SMEs for the economies SMEs constitute one of the alternatives for solving the problem of unemployment in the country by providing employment and creating new job opportunities SMEs contributes the regional development SMEs have a great deal of weight in economic structure in terms of numerical quantity, production value, employment volume, added value, investment volume and spread of ownership SMEs are the units that make the market economy based on dynamism and free competition larger.

Expectations of SMEs about financing 250 billion TL new credit opportunity through Reel Sector Credit Guarantee Fund will be provided. Collateral structure for the loans provided are respectively 100% for export purposes, 90% for SMEs, 85% for commercial loans. The required funding will be based on the transfers between the items in the 2017 budget and the actual savings. The Ministry of Industry with KOSGEB cooperation will provide intermediary support to SMEs; thus, 50,000 TL with the maturity of 36 months will be provided for the SMEs with no repayment for the first 12 months. The negative view in the credit ratings of some businesses will be discussed with the banks for recovery of the credit view and the obstacles to getting credit will be removed.

Continue: Expectations of SMEs about financing The Attraction Centers Program refers to the program to be implemented to support private sector investments through employment, production and export growth in order to reduce regional disparities and to revitalizes the investment climate in relatively less developed regions. The work that was initiated in order to facilitate access to finance came to the last stage in the number of SMEs in Turkey, about 3 million in order to find a solution to the "collateral" problem SMEs will now be able to pledge their movements ( physical capital like machines ) when they take out loans from banks. In this context, a new registrar system will be established. Kard Al Hassan

Activities related to SMEs by MÜSİAD MÜSİAD International Trade Fair, MÜSİAD Visioner for every two year Sector-oriented work units Reports and researches for each sector Business Development e-MÜSİAD Experience share meeting Connectivity between SMEs and government Business to business meeting International Business Forum

About MÜSİAD Independent Industrialists' and Businessmen's Association (MÜSİAD) is a "BUSINESSMEN'S ASSOCIATION" founded on May 5, 1990, in İstanbul, Turkey. It is a strong " CIVIL SOCIETY ORGANIZATON" that offers a reliable and wide business network with its nationwide branch offices, representatives and contact points abroad. MÜSİAD is the association through its 11,000 members representing 60,000 companies and 1,600,000 people in labour force. Its members and businessmen through its 86 branches offices in Turkey as well as 181 liasion offices in 68 countries all over the world.

SMEs’ assessments for the year 2016 According to the results of the survey conducted by MÜSİAD Economic Research Department In terms of Turkey's economic situation, how do you evaluate the year 2016 compared to the year 2015?

SMEs' expectations for the year 2017 How do you expect from 2017 compared with 2016 in terms of economic activity?

Problems confronted by SMEs Difficulties being faced by SMEs can be classifed into following two subcategories such as Internal issues and External issues Internal Issues External Issues Ineffective leadership Lack of fund channel Low level of statistics Tax structure Lack of a clear aim Fluctuations in FX market Less use of Information Technology Regulatory burden Capacity constraint Rapidly technological advancement

Conclusion It is necessary to develop a variety of financing methods for especially SMEs. Governments are supposed to implement policies that give SMEs extra incentives. Solid and reliable data related to SMEs should be increased and researches about SMEs should be expanded. Managerial clarity such as plan, strategy, goal oriented the SMEs should be shared with the employees.