In 2023, Türkiye’s economy remained resilient despite major shocks, including the February 2023 earthquake, global supply disruptions, and geopolitical tensions. GDP grew by 5.1%, supported mainly by strong domestic demand and a solid services sector, especially tourism. On inflation, pressures from energy and core goods eased somewhat in the first half of 2023 as energy price increases slowed and exchange rates stabilised. However, from the second half of 2023, Türkiye began a tight monetary policy stance to fight inflation. In 2024, growth moderated to 3.2% as the disinflation strategy introduced in mid-2023 (including sharp monetary tightening, with the policy rate rising from 8.5% to 50%) reduced domestic demand momentum. Inflation remained high and kept rising until May 2024, mainly due to persistent services inflation, but then peaked and started to decline.
Despite tight credit conditions, new SME lending increased by 33.6% in 2023-2024 period. In the same period, the share of outstanding SME loans in outstanding total business loans decreased to 35.2%. As of April 2025, outstanding SME loans increased by 33.2% compared to same period in 2024, reaching TRY 4917.1 billion. In this period, TRY 1.188 billion of new loans (FX adjusted) were provided to SMEs. The currency distribution reveals that TL loans account for 80.7% of the total SME loans. Moreover, as of April 2025, 57.5% of the total amount of SME loans have medium / long-term maturities.
Venture and private equity investments have increased markedly. After a sharp rise in 2020, (151.38% from 2019) Investments increased again in 2021 (269.06% year-on-year amounting to TRY 5.6 billion). That growth momentum continued into 2023 with an increase of 392.12% year-on-year reaching a record high of TRY 33.9 billion. By the 9-month period of 2024, these investments increased 4.64% year-on-year amounting to TRY 35.5 billion. Such impressive growth in the last years can be explained by the change of the legal framework in order to support entrepreneurship in Türkiye. Similarly, tax incentives for investors who invest in venture capital and private equity funds also supported the growth of the VC industry.
The share of non-performing loans (NPLs) in total business loans decreased to 1.49%, and the share of NPLs of SME loans increased to 1.98% in 2024.
The number of bankruptcies was stable in 2024. Company closures, including sole proprietorships, totalled 55 674 enterprises in 2024, lower than the figure in 2023. KOSGEB is the main body for executing SME policies in Türkiye, with the goal of increasing the productivity of these businesses through various services and programs. The support programs of KOSGEB, which provides direct services and support to SMEs, were restructured in 2024, and the number of programs was reduced and gathered around lean, accessible, digital and global axes.
In addition, a fund of funds platform was established in 2024 with the Ministry of Treasury and Finance and Development and Investment Bank of Türkiye (TKYB) as the main investors. This fund of funds is expected to contribute to increasing technological competence of Türkiye and create a significant multiplier effect in the entrepreneurship ecosystem by deepening capital markets through the leverage effect.
Within the Treasury backed credit guarantee system (system) that plays as a critical role in SME financing, besides the “Credit Guarantee Fund” (CGF), “Export Development Türkiye” (İGE) and “Katılım Finans Kefalet A.Ş.” (KFK) started to their guarantee activities in 2023 and 2025 respectively. Between 2023-2025, with approximately total TRY 285.4 billion credit was utilized by firms and within the system 78% of credits used by SMEs.
In 2024–2025, TÜBİTAK adopted a more SME-friendly approach, improving application processes and shortening evaluation times across its SME and entrepreneurship programs. Under this framework, entrepreneurs receive acceleration and investment support through the BİGG Funds and the BİGG+ Venture Capital Investment Fund, which provides seed finance for scaling. Key SME instruments include, the 1501 Industry R&D Program and the 1507 SME R&D Entry Program, strengthen R&D capacity, widen first-time participation, and support commercial outcomes. The 1507 program provides a dedicated track for SMEs’ first five R&D projects. Over the last five years, first-time applicants accounted for 45% of entries to 1507 and over 20% to 1501. A 2025 analysis showed net sales growth of 140.5% above comparable non-supported firms under 1501 and 255.2% under 1507. TÜBİTAK also uses demand-driven innovation including the 1707 Customer-Oriented R&D Call and the 1711 AI Ecosystem Call both of which connect customer organizations with SME technology providers. Over the last two years, as a total of 4 861 projects of 3 562 SMEs and entrepreneurs have been supported with TRY 11.2 billion.
The criteria used to identify SMEs in Türkiye have been updated with the SME Regulation published in the Official Gazette of Türkiye dated 7 August 2025 (Official Gazette of Turkish Republic, 2025). Under this Regulation, the SME definition has changed to include more enterprises within the scope of support. The annual turnover or annual balance sheet limit, which is one of the criteria for becoming an SME was increased from TRY 500 million to TRY 1 billion.