Celebrating the Impact of SMEs in Turkey
Small and medium-sized enterprises (SMEs) play a vital role in Turkey’s economy, making up the majority of businesses across the country. They significantly contribute to employment and production in both urban centers and smaller towns. Financial experts have highlighted this importance recently.
To recognize the contributions of these businesses on a global scale, the United Nations General Assembly established MSME Day, celebrated on June 27 each year since it was first observed in 2017. This year, the theme focuses on “Empowering MSMEs through Innovation and Sustainable Industrial Development.”
According to the UN, SMEs constitute 90% of businesses worldwide and provide about 70% of jobs, contributing significantly to global GDP. Humberto Lopez, the World Bank’s country director for Turkey, emphasized that small businesses are the backbone of the Turkish economy, supporting 70% of total employment.
Lopez pointed out that empowering SMEs is crucial not just economically, but also socially. Effective policies are needed to address challenges in access to finance, which many small businesses face. He mentioned that the financing gap for SMEs in developing countries reaches trillions of dollars, and Turkey is no exception.
Between 2020 and 2023, World Bank initiatives have injected funds into over 87,000 Turkish MSMEs, helping to create or sustain approximately 115,000 jobs amidst the COVID-19 pandemic and following devastating earthquakes in February 2023. Notably, a large percentage of new hires were young workers and women.
After the earthquakes, the World Bank provided $450 million in financing to around 40,000 businesses in affected areas. These enterprises struggled not only with physical damage but also with disruptions in their market connections and supply chains.
Lopez encouraged SMEs to adopt digital solutions and strengthen their resilience against future challenges, asserting that financial support alone isn’t enough for success. He emphasized the importance of improving efficiency and expanding capabilities in low-tech sectors.
Lisa Kaestner, an official at the International Finance Corporation (IFC), echoed these sentiments, highlighting that SMEs serve as a foundation for the economy. They play crucial roles in local supply chains and contribute to exports and digital transformation.
Kaestner described how the IFC’s approach in Turkey focuses on ensuring that SMEs have access to financing, enabling them to grow, innovate, and create jobs. She noted that, as of late 2025, SMEs only received a small fraction of total bank loans despite their significant role in employment.
To improve this situation, the IFC is partnering with banks and private equity funds to develop tailored financial products for smaller businesses. They recently provided a $350 million recovery package aimed at supporting 55,000 MSMEs in disaster-affected regions, which included farmers and other local businesses.
Looking ahead, Kaestner pointed out that diversifying financing options and mobilizing private capital are vital for the growth of SMEs in Turkey. She emphasized the importance of increasing women’s participation in the workforce, which could substantially boost the country’s GDP.
In conclusion, Turkey’s SMEs are essential for economic stability and growth. Empowering these businesses through better access to finance and resources can create a more robust economy for everyone.
