This is not a temporary recession, but a structural economic blockage in which credit channels are effectively closed, cash is withdrawn from the market and SMEs are quietly being pushed out of the system.
It is not possible to explain the current situation in the Turkish economy with the concepts of “tight monetary policy”, “fighting inflation” or “cyclical contraction”. This is because the situation on the ground, especially for small and medium-sized enterprises, is not a classic economic slowdown, but a structural cash crisis.
Today, SMEs can neither plan for growth nor set an investment agenda. The basic question being asked is now:
“Will I be able to get this bear out?”
Credit Mechanism Deactivated
Although official rhetoric suggests that credit channels are open, the situation in the real sector is quite the opposite. The banking system has become virtually credit-free for SMEs.
New loan requests go unanswered, existing limits are not increased, restructurings are subject to onerous conditions, and collateral and risk criteria are lowered to unattainable levels. Therefore, the problem faced by SMEs today is not “over-indebtedness”, but rather the cessation of access to finance.
KGF In Theory, Not in Practice
The Credit Guarantee Fund, the most frequently mentioned instrument of the state for SMEs, has largely lost its function in the field. KGF supports are included in policy documents and publicized; however, they are not sufficiently reflected on the real sector.
Banks do not extend loans despite KGF collateral, prolonging processes and avoiding risk. This situation has transformed KGF from an effective financing instrument into a symbolic policy title.
Cash Flow Disrupted, Business Cycle Weakened
Most SMEs today are affected not by a lack of production or sales, but by collection problems. Maturities have lengthened, cash return periods have deteriorated, and the commercial balance has broken down.
In the market's own language, this is the process of “changing the cone” in which one debt is paid off with another debt. However, this method is not a sustainable business model; it is a survival reflex specific to times of crisis.
Tax Structure Deepens Crisis
While SMEs cannot access cash, the public collection system continues to operate with the same rigidity. VAT is paid on uncollected invoices, inflation-driven turnover increases are taxed as real income, and tax and premium obligations arise before profits are realized.
Instead of supporting SMEs, this structure leads to capital erosion and deepens the crisis.
This Table is a Macroeconomic Risk, Not an SME Problem
SMEs account for about of enterprises in Turkey, about of employment and the main carrier of local production-service chains. A financial weakening of this segment means a weakening of the resilience not only of individual businesses but also of the national economy.
Today, this silent space is the most overlooked vulnerability.
It should be noted as a warning;
SMEs do not demand support or privileges. What they are asking for is accessible credit, a tax structure in line with cash flow, and public policies that touch the real sector.
Unless these steps are taken:
- businesses will close,
- employment will shrink,
- economic balance will be disrupted.
This result will not be a surprise.
Because what has been happening has been clear for a long time.