1. JULY, 09-10, 2007 ISTANBUL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION NEDRET UGUR YAVUZ KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

2. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION Services and Supports are supplied by KOSGEB Centers  Entrepreneurship Development Center  Regional and Local Development Center  Market Research and Export Improvement Center  SMEs Credit Support Management and Monitoring Center  Training And Consultancy Center  Economic and Strategic Researches Center;  Enterprise Improvement Centers  Technology Improvement Centers  Regional Industry Development Centers

3. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION Supports under 22 main headings in 8 Groups  Consultancy and Training Supports  Technology Development and Innovation Supports  Market Research and Export Promotion Supports  International Cooperation Development Supports  IT Supports  Quality Improvement Supports  Regional Development Supports  Entrepreneurship Development Supports  SMEs Credit Supports

4. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION FINANCIAL ENVIRONMENT OF TURKISH SMEs  ABSENCE OF A CLEAR LEGAL FRAMEWORK FOR MICROFINANCE INSTUTIONS  INSUFFICIENT CAPITAL  LACK OF KNOWLEDGE OF FINANCIAL SOURCES  DIFFICULT TO REACH CREDIT AND LOANS  HIGH COST OF FUNDING  COLLATERAL REQUIREMENTS  POOR FINANCIAL INSTRUMENTS

5. THE KEY CHARACTERISTICS OF THE MICROFINANCE INDUSTRY IN TURKEY ARE;  SUPPLIERS OF MICROFINANCE SERVICES CURRENTLY ARE THE STATE-OWNED BANKS  THERE IS NO FINANCIAL INSTUTION ESTABLISHED FOR THE PURPOSE OF FINANCIAL SUPORT TO SMEs  THE ABSENCE OF A CLEAR LEGAL FRAMEWORK FOR NGOs/MFIs  THE RIGID REGULATIONS OF BANKING SYSTEM (SUCH AS COLLATERAL REQUIREMENTS FOR SMEs)

6.  THE ABSENCE OF A CLEAR LEGAL FRAMEWORK FOR MICROFINANCE INSTUTIONS, MAKES IT RISKY FOR THEM TO OPERATE  DRAFT LEGISLATION IS CURRENTLY UNDER CONSIDERATION TO ALLOW FOR BANKING AND NON-BANKING INSTUTIONS THAT FOCUSES ON THE MICROFINANCE MARKET  AN ENABLING LEGAL AND REGULATORY ENVIRONMENT WILL PROMOTE SUSTAINABILTY AND GROWTH SECTOR  A MATURE MICROFINANCE SECTOR TURKEY WILL COMPRISE A VARIETY OF INSTUTIONAL FORMS LIKELY INCLUDING  GOVERNMENTS (PUBLIC ORGANIZATIONS RELATED WITH SMEs LIKE KOSGEB), LOCAL AUTHORITIES/SMEs’s REPRESANTATIVES (CHAMBERS OF INDUSTRY &TRADE), NGOs (NON-BANKING FINANCIAL INSTUTIONS/SPECIALIZED MICROFINANCE BANKS)

7.  DEVELOPMENT OF A MICROFINANCE SECTOR WILL REQUIRE FINANCING FROM INVESTORS INCLUDING DONORS, GOVERNMENT,DEVELOPMENT BANKS & THE PRIVATE SECTOR.  LOAN CAPITAL REQUIREMENTS AT $ 2-$ 3 BILLION  DONOR FINANCING CAN BE USED FLEXIBLY BY AN INSTUTION TO COVER START-UP COST, OPERATING SHORTFALLS UNTIL BREAKEVEN AND THE LOAN PORTFOLIO IN TURKEY  GOVERNMENTS IN COLLABORATION WITH OTHER PUBLIC SECTOR AGENCIES HAVE TO BE DEVELOPING MICRO-FINANCE SUPPORT STRATEGIES THAT STUATE MICROFINANCE INSTUTIONS ANDTHEIR CLIENTS WITHIN THE OVERALL FINACIAL SYSTEM

8. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION SMEs’ finance problems of  working capital,  expansion of the existing enterprises,  export and  new employment

9. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION THE ROLE OF KOSGEB IN SOLVING THE FINANCIAL PROBLEMS OF SMEs

10. SMEs CREDIT SUPPORTS OF KOSGEB

11. SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION By the Decision numbered 2004/7131 Council of Ministries about “SME Development and Support”

12. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION By starting 2003 the budget sources of KOSGEB has been allocated to SMEs in low or zero interest by the intermediary of State-Owned Banks.

13. STRATEGIES OF CREDIT SUPPORT SYSTEMS OF KOSGEB  The budget sources of KOSGEB has been allocated to real sector  The less bureaucracy and the paper works through web-based on-line system between KOSGEB and Banks.  0 interest rate KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

14. FUNCTIONS OF SME CREDITS CENTER  MANAGEMENT OF THE CREDIT PROGRAMMES WITH THE OTHER UNITS OF KOSGEB  TO PUT IN ACTION THE CREDIT PROGRAMMES  TO CONDUCT THE RELATIONS WITH INTERMEDIARY BANKS  TO PREPARE THE PROTOCOLS BETWEEN KOSGEB AND THE BANKS  FOLLOW UP AND MONITOR THE CREDIT PROGRAMMES ON WEB-BASED SOFTWARE KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

15. KOSGEB ASSISTS A NUMBER OF CREDIT PROGRAMMES ON THE FOLLOWING AREAS  EXPORT PROMOTION  NEW EMPLOYMENT  DIGITAL INFRA-STRUCTES of SMEs  MOVING THE LEATHER SECTOR TO INDUSTRIAL ZONES  MACHINERY AND EQUIPMENT CREDIT FOR FOOD SECTOR KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

16. KOSGEB has been signing Protocols with State-Owned Banks for realising the financial models KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

17. KOSGEB has signed a Protocol with VAKIFBANK for working/ investment credits (23.05.2003-31.12.2005) Term: 24 months Interest rate: Tefe+5 Limit: 100.000 USD eq. YTL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

18. KOSGEB-VAKIFBANK SMEs Credit Programme (23.05.2003-31.12.2005) Number of SMEs Amount of Credit (USD) 1046 98.641.900.- KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

19. KOSGEB-HALKBANK Express SMEs Credit Programme (01.12.2003 - 12.03.2004 ) Number of SMEs Amount of Credit(USD) 114373.731.000.- KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

20. KOSGEB has signed a Protocol with HALKBANK for SMEs WORKING CREDIT (01.12.2003-12.03.2004) Terms :3 months Non-payment term: 8 months Interest rate: Tefe+3 Limit: 75.000 YTL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

21. KOSGEB SMEs Credit Programme for Export Promotion (30.06.2004- 31.05.2006) Number of SMEs Amount of Credit (USD) 6682 607.640.892.- KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

22. KOSGEB has signed a Protocol with VAKIFBANK for credit of new employment Term : 12 months Interest rate: 0 Limit: 100.000 YTL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

23. KOSGEB-VAKIFBANK SMEs Credit Programme for New Employment (20.09.2005 - 31.05.2006) Number of SMEs Amount of Credit(USD) 1059 84.325.000 (3523 New Employed) KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

24. OVERALL TOTAL (23.05.2003-31.05.2006) Number of SMEs Amount of Credit (USD) 9930 1.140.511.577.- KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

25. KOSGEB has signed a new Protocol with VAKIFBANK for credit To buy computers and to promote the use of Internet by SMEs Term : 24 months Interest rate: 0 Max. limits: : 25.000YTL : 15.000YTL : 7.500YTL : 2.000YTL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

26. The pay-back support will be provided  to make the enterprises compete in the world markets  increase their competition level,  develop their internet culture,  benefit from internet services and  gradual initiation of the e-commerce,  and also, benefit from the services provided by KOSGEB via internet, KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

27.  To Create awareness on benefits of the usage of IT technologies in companies,  in order to create e-commerce,  contribute to the development of B2B activities among SMEs KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

28.  Computers, software applications, internate usage cost too much  Within the KOSGEB’s Project it is aimed  to support for hardware expenses and to promote the use of Internet by SMEs  TURK TELEKOM supplies a telecommunication service ADSL free for 2 months,  Free web-hosting services with e-post address and training opportunities will be supplied also. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

29. By this Project it is aimed;  Establishment of technically developing infrastructure and related services for e-Commerce and e-Business application,  Providing the necessary infrastructure, programs and internet usage,  to promote investment, export and working/production effectiveness of firms. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

30. The pay-back support will be provided  to make the enterprises compete in the world markets  increase their competition level,  develop their internet culture,  benefit from internet services and  gradual initiation of the e-commerce,  and also, benefit from the services provided by KOSGEB via internet, KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

31. KOSGEB ASSISTS A NUMBER OF CREDIT PROGRAMMES ON THE FOLLOWING AREAS  EXPORT PROMOTION  NEW EMPLOYMENT  DIGITAL INFRA-STRUCTES of SMEs  MOVING THE LEATHER SECTOR TO INDUSTRIAL ZONES  MACHINERY AND EQUIPMENT CREDIT FOR FOOD SECTOR KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

32. KOSGEB Has been signing Protocols with State-Owned Banks for realising the financial model for Export Promotion Credit Interest Support (09.04.2007) KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

33. By this Project Export Promotion Credit Interest Suppor it is aimed  To make the enterprises compete in the world markets  To increase their competition level,  To promote their export capacity, KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

34. Export Promotion Credit Interest Support Term: 6 months Interest rate: 0 Limit: 100.000 USD eq. YTL KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

35. KOSGEB SMEs Credit Programme for Export Promotion (09.04.2007 – 31.05.2007) Number of SMEs Amount of Credit (USD).- KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

36. KOSGEB has signed a new Protocol To promote the Registered New Employment Term : 24 months Interest rate: 0 Max. Number of employee: 5 Max. limits: :the loans granted limited by YTL 100.000.- at most KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

37.  KGF was founded in 1994 as a joint stock company under private law by a number of Turkish SME organisations.  KGF’s mission is to provide guarantees to existing SMEs and start-ups with insufficient collateral or track record.  Guarantees are provided for all kinds of credit needs.  KGF provides loan guarantees up to 80% to SMEs with insufficient collateral. KOSGEB SMALL AND MEDIUM INDUSTRY DEVELOPMENT ORGANIZATION

38. For more information;  http://www. kosgeb.gov.tr THANK YOU