02.08.2022 ANKARA
The Union of Chambers and Commodity Exchanges of Turkey (TOBB) Sector Councils Consultation Meeting was hosted by TOBB President M. Rifat Hisarcıklıoğlu with the participation of Şahap Kavcıoğlu, Governor of the Central Bank of the Republic of Turkey, and the Presidents and Members of 65 Sector Councils operating within TOBB.
TOBB President
Hisarcıklıoğlu, in his opening speech, emphasized that the need for credit for
investment and working capital increased compared to past periods due to high
inflation and cost increases, and said that taking into account the increasing
need for working capital, it is necessary to be sensitive about the side
effects of the measures taken and that the banking system should facilitate
access to credit.
Hisarcıklıoğlu, stating
that they believe that common sense and consultation are important and
necessary in the process they are in, said, “In this context, we are bringing
together all the sectors in our country here today. In our sector Councils, the
40 largest companies in each sector take place. In addition, in each assembly,
there are representatives of public institutions related to that sector. In
this way, our sector councils operate as a very important consultation
mechanism where the private sector and the public administration come together,
consult around the same table, work together, discuss the problems and transfer
the agreed proposals to the relevant Ministries.”
Hisarcıklıoğlu said
that despite all the difficulties experienced, the Turkish economy has grown
much faster than other countries in the recent period, exceeding the
pre-pandemic levels in exports, production and employment.
Pointing out that in
addition to the increases in inflation and production costs at home, they are
also faced with rising raw material and energy prices all over the world,
Hisarcıklıoğlu said, “The Russia-Ukraine war, China-Taiwan tension, problems in
energy and food supply, the resurgence of Covid-19 and the increase in interest
rates around the world affect global growth downwards. For the rest of 2022, a
more bleak and more uncertain environment awaits the world. Therefore, in this
challenging period that we are facing, ensuring that our companies have access
to finance under appropriate conditions is critical for our country's economy.”
Hisarcıklıoğlu stated
that access to finance has become difficult in the recent period and that
complaints from companies in every province and district have increased in this
direction and continued: “The biggest problem is experienced by our small and
medium-sized enterprises that need to be considered the most. In addition to
the rise in loan rates, it is conveyed that credit limits are narrowed in real
terms and there are problems in use.While the Central Bank funding interest rate is 14% and the
average interest on deposits is around 20%, it is seen that some banks apply
interest between 30% and 50% on commercial loans. Some of them don't give
credit at all.”
Emphasizing that another
problem is loan maturities, the TOBB President said: “It is becoming
increasingly difficult to find long-term and fixed-rate loans required for
investments. On the other hand, complaints about the decrease in Central Bank
rediscount loan disbursements, which is a very important opportunity for our
exporters, are also increasing. The desire of the real sector is for stability
to prevail in the credit markets. Because every company that invests, exports
and provides employment in our country is our national value and needs to be
protected.
On the other hand, due
to high inflation and cost increases, the need for credit for investment and
working capital has increased even more than in previous periods. Working
capital loans have become critical for SMEs in particular to continue their
activities. Therefore, taking into account the increasing need for working
capital, it is necessary to be sensitive about the side effects of the measures
taken and to facilitate access to credit in the banking system.
Our banks are also
expected to provide loans to our real sector on favorable terms and to act
constructively, taking into account the funding costs. Thus, our real sector
will continue to make the maximum contribution to investment, production,
exports and employment by overcoming all manner of negative conditions with the
least damage. I hope that today's meeting will be an important opportunity to
better understand each other mutually, especially to reduce the difficulties
experienced in accessing loans.”
- CBRT Governor
Kavcıoğlu
The Central Bank of the
Republic of Turkey (CBRT) Governor Şahap Kavcıoğlu pointed out that the
increasing geopolitical risks in the nearby region, which started with the
Covid-19 outbreak, and the increasing energy problems, supply constraints and
disruptions in the supply chain led to negative reflections on a global scale.
However, energy and
commodity prices, especially in the supply times of developing countries, have
improved somewhat recently, Kavcıoğlu said, adding that due to these
developments, they have seen that the pressures accumulated on production costs
have gradually decreased.
Pointing out that net
exports and machinery-equipment investments played an important role in strong
growth, Kavcıoğlu emphasized that net exports contributed positively to growth
for the last 5 quarters consecutively when the components of growth were
examined.
Kavcıoğlu pointed out
that machinery and equipment investments continue in a healthy and sustainable
framework and that these investments indicate a stable and strong growth.
Stating that many
countries could not compensate for the losses in labor force participation
during the pandemic period, Kavcıoğlu said, “On the other hand, the fact that
labor force participation and employment indicators have risen above
pre-pandemic levels shows the vitality and robustness of labor markets in the
normalization process.”
Pointing out that the
role played by the Central Bank in supporting investment, employment,
production and exports in the recent period has been dramatically revealed by
the loans used by the companies, Kavcıoğlu said that in the first 6 months of
2021, the net disbursement of TL loans increased from 75.6 billion to 820
billion TL in the same period of 2022, which was a significant increase.
Kavcıoğlu pointed out
that the growth rate of the disbursement of all loans, including foreign
currency, in the first half of 2021-2022 was close to 500%, adjusted for
exchange rate effects, and shared the following information: “The loans provided
in the first half of 2022 reached almost 3 times the entire year of 2021. SME
loans amounted to 372.8 billion liras in the first 6 months of the year, well
above the 27.3 billion liras in the same period of 2021. In this period when
the loans provided showed a record increase, access to credit was strong and
widespread enough to be reflected in the number of companies using credit.
Between December 2021 and June 2022, the number of companies granted loans
reached approximately 2 million from 1,878,000 in total. The number of SMEs
using credit increased by 195,000, reaching 2,056,000.”