A new project will help avert the closure of viable micro and small enterprises (MSEs) affected by the health and economic shocks of the COVID-19 pandemic and maintain employment levels during the crisis. The $300 million Rapid Support for Micro and Small Enterprises Project for Turkey, implemented by the Small and Medium Enterprises Development Organization of Turkey (KOSGEB), will help people and firms by providing reimbursable support financing for manufacturing firms and other, innovative young firms focusing on manufacturing, scientific research and development, and computer programming.
The Project will provide financing in the form of performance-based reimbursable support to eligible MSEs, including innovative young firms that have been negatively impacted by COVID-19 but remain financially viable and are likely to survive the crisis, if they can access funding to meet their temporary liquidity needs.
“The World Bank Group’s approach to supporting client countries in mitigating the impact of COVID-19 on their economies, firms, and workers entails preserving the conditions for sustainable business growth and job creation in the future as countries respond to the immediate impacts of COVID-19 and lay the foundation for a resilient recovery,” says Auguste Kouame, World Bank Country Director for Turkey. “Consistent with this framework, the World Bank is pleased to contribute to the support of viable firms and protection of vulnerable jobs in Turkey.”
The COVID-19 pandemic has created a combination of both supply and demand shocks to firms across the country on a scale which has not been seen in recent history. Access to finance has deteriorated for firms – particularly MSEs that were credit constrained even before the crisis struck. Without adequate and timely support, otherwise viable firms, upon which the livelihoods of a large number of poor and vulnerable households depend, face the risk of permanent closure – threatening jobs and jeopardizing the prospect of a speedy economic recovery.
“The WB financing provided under the project will go to Micro and Small Enterprises in Turkey, which are the main source of employment for poor and near-poor households and account for more than 40 percent of employment in the manufacturing sector,” remarked Stefka Slavova, Lead Economist at the World Bank and co-Task Team leader of the project.
“These MSEs have been especially impacted negatively during the ongoing health and economic crisis caused by COVID-19 and need support to withstand the crisis,” added P. Facundo Cuevas, Senior Economist at the World Bank and co-Task Team Leader of the Project.
The project will pay special attention to women-owned firms and is aligned with Turkey’s Country Partnership Framework (CPF) for the FY18-23, which focuses on the three strategic areas of growth, inclusion, and sustainability.