Türkiye’s small and medium-sized enterprises (SMEs) have become a critical engine of employment and economic growth. Senior representatives from the World Bank and the International Finance Corporation (IFC) underscored the pivotal role of this sector during the observance of the UN’s MSMEs Day, emphasizing its significance in contributing to economic resilience and job creation.
Globally, micro, small, and medium-sized enterprises represent about 90% of all businesses and generate approximately 70% of employment, accounting for nearly half of the world’s gross domestic product, according to the United Nations. Recognizing their importance, the UN General Assembly marked June 27 as MSMEs Day in a resolution passed in April 2017. This year’s theme, “Empowering MSMEs through Innovation and Sustainable Industrial Development,” resonates with ongoing efforts to support these businesses.
### SMEs as Employment Pillars in Türkiye
Humberto Lopez, the World Bank’s Country Director for Türkiye, highlighted that SMEs generate around 70% of the country’s overall employment. He asserted that creating supportive policies for these businesses is not only economically vital but also a significant social imperative. The World Bank and IFC are collaborating to leverage various tools across public and private sectors, including policy reforms and crisis management strategies, to assist what he describes as a vibrant and extensive economy.
Lopez pointed to low-tech manufacturing as a promising area for growth, where many small enterprises are capable of improving productivity, embracing digital technologies, and increasing their value contributions with appropriate support mechanisms.
### Financial Support for Resilience
From 2020 to 2023, initiatives backed by the World Bank provided financing to over 87,000 MSMEs in Türkiye, successfully creating or preserving around 115,000 jobs amid the challenges posed by the COVID-19 pandemic and subsequent earthquakes in February 2023. Notably, about 77% of new positions aided by these programs were filled by individuals under 30, with 61% being women, illustrating a strong commitment to inclusive recovery.
Around 40,000 MSMEs located in disaster-stricken areas received $450 million in post-earthquake funding from the World Bank. This assistance helped businesses reconnect with supply chains, restore workforce capacity, and stabilize their financial situations in exceptionally tough conditions.
### Expanding Financial Instruments for SMEs
Lisa Kaestner, the IFC’s Division Director for Türkiye, Kazakhstan, and Uzbekistan, stated that SMEs are foundational to the economy, impacting supply chains, local markets, exports, and digital evolution. The IFC unveiled a $350 million funding package distributed through five private banks to assist recovery efforts for small businesses affected by the earthquakes, directly benefiting 55,000 MSMEs, including local farmers.
Kaestner emphasized the importance of forging partnerships with private banks and other financial entities to develop tailored financial products for smaller enterprises, addressing needs such as working capital, energy efficiency, and supply chain integration. These collaborations aim to complement traditional lending, driving growth and productivity.
### Prioritizing Women’s Economic Participation
Looking ahead, Kaestner outlined the IFC’s priorities, which include attracting more private capital and bolstering non-bank institutions like leasing and factoring companies. She stressed that closing the gender gap in the workforce could result in a remarkable 25% increase in GDP, signaling the critical role of women’s participation in economic development.
Lopez echoed this perspective, asserting that enhancing the efficiency, resilience, and inclusivity of Türkiye’s SME sector—particularly through focused support for women, youth, and businesses in underserved regions—will play a significant role in the nation’s sustainable growth narrative. By prioritizing these areas, Türkiye can fortify its economic foundation and drive progress towards a more inclusive future.