Mekosan Boru, a manufacturer of pipe packaging, countersinking and grooving machines, and pipe and profile painting lines, has relieved its cash flow with the FOSTER Project loan and aims to expand its product range. Company partner Hamdi Atay states that they used the loan provided within the scope of the Employment Committed SME Finance Support Programme in prototype manufacturing and R&D activities.

After working as a senior manager in the private sector for years, Hamdi Atay established Mekosan Boru in Kayseri in 2010 with his friends. Mekosan Boru has an annual production capacity of 45 machines. Atay adds that their biggest motivation while establishing Mekosan was “to produce the machines that are not manufactured in Turkiye and to lead the sector”. Atay states the pipe profile packaging machine production was previously led by Italian companies and the sector became more competitive with Mekosan’s inclusion. They have stopped imports and currently started exporting to 49 countries, including the United Kingdom, Saudi Arabia, Greece, Germany and the United States of America.

Atay explains that they mainly used the loan for R&D and prototype manufacturing, as well as covering employees’ salaries, and expenses of electricity and mechanical parts. FOSTER Project Employment Committed SME Finance Support Programme loan attracted Mekosan due to reasons such as “easy application, easy and subsidized payment procedure”.

Finding qualified employees has been one of the most important difficulties that the enterprise has faced since the establishment of its business. Atay emphasized that they train their employees to improve their skills. He notes that they have employed two people as part of the FOSTER Project and adds that the employment has been sustained as a result of the project, and they are pleased to be able to contribute to the labour force they require rather than employee circulation.

Madosa Tekstil operates in Kahramanmaraş where the devastating earthquake occurred. They can benefit from the FOSTER Project thanks to the flexibilities introduced for SMEs affected by the earthquake. Madosa Tekstil, which purchased raw materials with the loan received from the Employment Committed SME Finance Support Programme, plans to increase its production in the future.

Madosa Tekstil, which lost four employees in the February 6, 2023 earthquake, was discovered to be slightly damaged during post-earthquake inspections. Just one week after the earthquake, the business owners resumed production. Yet, due to the earthquake, the enterprise was unable to meet its FOSTER Project employment commitments because its employees were relocated to different provinces. Serkan Kayabaş, Personnel Supervisor, stated that they have continued to benefit from the project through the flexibilities introduced to the earthquake-affected provinces, and added, “In the first monitoring period, we could not apply for the support for the repayment of half of the interest payment because most of our employees moved to other cities and we could not meet the previous year’s average number of SSI premium days. We were already having difficulty finding employees for the new employment commitment, but thanks to the new flexibilities, we were able to apply for payment for two monitoring periods, which were promptly paid.”

Kayabaşı stated that they used the loan provided by the Employment Committed SME Finance Support Programme to purchase yarn as raw material and that they chose the loan because of “its long maturity, low and subsidised interest rate / profit share.

Madosa Tekstil manufactures raw fabric in its facility built on a total area of 16 thousand square metres, 13 thousand square metres of which is a closed area. In 2022, the company produced 31.8 million square metres of fabric and is still producing today with 138 machines and 150 employees. Because it primarily sells to Istanbul and Bursa, the company encountered no problems with post-earthquake orders. Madosa’s current goal is to increase production, and the company plans to expand its machinery park next to its existing facility in the future.

Gülsan Metal operates in different areas of the aluminum sector from scrap trading to profile production and made its water tower investment in their new aluminum billet facility through the loan provided within the FOSTER Project Employment Committed SME Finance Support Programme. Yaşar Birgül, the Chairman of the Board of Directors of the company, states they preferred the loan due to its low interest rate / profit share and long-term maturity.

Yaşar Birgül started working in his father’s scrap trading business when he was 21 years old. He established Gülsan Metal with his brothers in 2000 and began selling imported aluminum and contract-made aluminum billets to the domestic market. During the pandemic, Gülsan Metal began producing aluminum profiles, and they now produce 320 tons of aluminum profiles per month, approximately 40% of which are exported. Birgül adds that they primarily manufacture curtain and furniture profiles.

They have also expanded their aluminum billet production to Bilecik, where they will produce billets using 800 tons of scrap and 400 tons of ingot aluminum per month, with the remainder being sold to the market.

“We installed a water tower which is crucial for our operations to cool down the aluminum billets through the loan we used within the FOSTER Project and purchased the raw materials.” He adds that they intend to manufacture solar energy panel frames in the future.

The FOSTER Project improved the competitiveness and sales of Oturakçı Toys, which received a loan through the Employment Committed SME Finance Support Programme to purchase raw materials on favorable terms.

The enterprise’s owner, Mehmet Oturakçı, notes that purchasing raw materials shortly before the earthquake via the loan relieved them significantly in the post-earthquake period; he also stated, “FOSTER Project’s loan brought us some fresh blood.”

Mehmet Oturakçı began his business career at a young age by selling souvenirs and stationery. In the years that followed, he pursued his entrepreneurial spirit by beginning to sell toys at retail and wholesale.  Mr. Oturakçı claims that they produce over 1 million toys per year and that his main motivation is to make children happy with the toys he creates. Toys, he believes, are the greatest gift that families can give to their children, aside from love.

The retail shop and the factory’s administrative office were damaged in the earthquake that occurred on February 6, 2023, in Oturakçı Toy’s Şanlıurfa Organised Industrial Zone facility, which is built on a total area of 17 thousand m2, of which 6 thousand m2 is indoor area.

Mehmet Oturakçı explains that their production has been slowed for two months, and their cash flow has been affected because they have not received payments from customers in Kahramanmaraş, Adyaman, and Hatay.

Oturakçı Toys preferred to receive the loan within the FOSTER Project to meet their raw material needs due to the low and subsidized interest rate / profit share. Oturakçı states that “Due to the exchange rate difference, our prices became cheaper and more competitive than other enterprises, and this has increased our sales”. Oturakçı Toys currently supplies goods to the domestic market and exports to France, with the current goal of expanding their export markets.

While supporting thousands of SMEs, FOSTER Project contributes to the formal employment of people by creating job opportunities. Emine Değirmencioğlu is one of these people and lives in Kayseri. After searching for a job for years in a corporate company, she made her dreams come true thanks to the FOSTER Project. Değirmencioğlu, who started working at T EN ENERJİ in Kayseri, dreams of providing employment opportunities for young people and women when she becomes a manager one day.

Değirmencioğlu is 30 years old and graduated from Erciyes University, the Department of International Relations, in 2015 and she completed the Department of Theology at the Open Education Faculty in the same period. After working as an English teacher for a year, she decided to work in a corporate company. However, she couldn’t find a job she had dreamed of. “I was looking for a job, the interviews were going well, but I couldn’t find a job because I had no experience,” Değirmencioğlu describes that period. Before finding her dream job, she gave private English lessons and attended different courses at the Public Education Center at the same time. Degirmencioğlu says “I was thinking of improving myself in other areas to be able to increase my job opportunities. While teaching, I also established my own small business and made online sales”. However, she continued to look for a job in a corporate company and to advance her career. At the end of six years, thanks to the FOSTER Project, she started working at T EN ENERJİ. Değirmencioğlu, who manages the social media accounts of the enterprise and the international business, provides support for the coordination of the units as well. She describes her emotions:  “I have a job where I will gain experience in the field of my education and have new experiences that will broaden my horizons. Being in the work environment and adding new experiences to my life is truly precious. The process has been busy, peaceful, and happy since I started working.”

She explains why finding a job is also crucial for her by saying “After a 6-year process to find a job, I am happy to see myself as an individual who produces and contributes to the family budget which makes me and my family happy.” While noting that she is now employed thanks to the support provided to the company that hired her, she wishes for other employment projects for women especially recent graduates to increase.

FOSTER Project Team has conducted the Environmental, Social, Health & Safety (ESHS) Compliance Monitoring between October 30 and December 8, 2023. Project Team paid site monitoring visits to beneficiary SMEs that are classified as “medium” risk according to their sectors and sizes. Through visits, it is aimed at strengthening their compliance with national legislation and international standards regarding the environment, occupational health and safety, and social requirements.

ESHS compliance offers a complementary approach to support SMEs in becoming environmentally and socially responsive enterprises while promoting sustainability. The primary goal of the mission is to empower SMEs for their transformation into enterprises that are environment-friendly, binding to national environmental, occupational health & safety, and social laws, regulations, and international standards. The Project Team also provides feedback through the reports indicating areas for improvement in line with the Environmental and Social Management System established within the FOSTER Project. In accordance with the comprehensive assessments made during the visits, SMEs are encouraged to take the necessary steps to ensure a sustainable future.

Institutional Capacity Building activities for the FOSTER Project Team continue.

424 people attended certified trainings in 11 different fields, ranging from the environment, monitoring and evaluation to finance and project management. Participants received a total of 211 hours of training from leading experts.

Environmental and Social Requirements, Project Writing, Management and Implementation, Advanced Presentation Techniques, Institutional Crisis and Risk Management, Basic Finance, Work Permit Procedures and Applications, Business English, Monitoring and Evaluation, SME Finance, Environmental and Social Monitoring, Effective Project Management Trainings were delivered within the FOSTER Project’s Institutional Capacity Building activities.

Within the SME Finance Training, participants received theoretical and practical training on a variety of topics, including international trends in SME finance, financial analysis, SMEs’ access to finance challenges, and alternative financing techniques.

A comprehensive training programme has been provided on data collection and analysis, evaluation cycle and framework in the Monitoring and Evaluation Training.

Frankfurt School of Finance & Management has delivered participants the Effective Project Management Training in Frankfurt which consists of project planning, working with partners, project implementation, monitoring and control, business communication, conflict management, project team and leadership.

The feedback of the participants on the trainings prepared in line with the Training Needs Assessment was also positive and supportive of capacity building.

FOSTER Project Team and the Employment Committed SME Support Programme’s beneficiary SMEs have met via online information meetings. Meetings were held between September 4 and 8, 2023, and SMEs were given information about the programme and the implementation process.

The programme conditions and the monitoring process, which will be carried out every four months, have been explained to SMEs. Meetings were conducted for five days with the participation of SMEs from different project provinces.

In addition, detailed information was provided about the program’s flexibility to SMEs in Adana, Gaziantep, Hatay, Kahramanmaraş, Kilis, and Şanlıurfa that were affected by the earthquake. Questions from SMEs regarding the employment commitments and support payment procedures were addressed.

The FOSTER Project Employment Committed SME Support Programme will provide SMEs with grant support totaling approximately TRY 1,4 billion. Beneficiary SMEs will be able to receive up to TRY 1 million in grant support for personnel expenses as well as machinery, equipment, moulds, software, and training.

TRY 1.4 Billion Grant Support for SMEs from FOSTER Project

The SMEs that will benefit from the FOSTER Project’s grant programme, which is funded by the European Union, managed by the KfW Development Bank, and run by KOSGEB, have been announced. A total of TRY 1,4 billion in grant support will be provided to approximately 1,500 SMEs under the scope of the programme.

FOSTER Project Employment Committed SME Support Programme will contribute to creating and retaining over 5,800 jobs in project provinces. Beneficiary SMEs will be able to benefit from up to TRY 1 million in grant support for personnel, machinery, equipment, molds, software, and training expenses. Within the program’s scope, the support ratio is 70% for eligible personnel expenses and will be increased to 100% for beneficiary SMEs creating jobs for youth (under the age of 30) and/or women.

FOSTER Project Seventh Technical Steering Committee Meeting was Held at KOSGEB

The FOSTER Project’s Seventh Technical Steering Committee Meeting was held in a hybrid format, with representatives from the European Union Delegation in Türkiye, KfW Development Bank, and KOSGEB PMU in attendance. At the meeting on September 11, 2023, the progress made within the scope of the project was discussed. The presentation detailed the accomplishments made under the Interest Rate / Profit Share Mechanism, SME Support Mechanism, Institutional Capacity Building, and other activities. The meeting also covered planned activities for the next implementation period.

FOSTER Project Fifth Steering Committee Meeting was Held Online

The Fifth Steering Committee Meeting of Empowering the Private Sector to Foster Social and Economic Cohesion (FOSTER) Project was held online on September 12, 2023. Representatives from the European Union Delegation to Türkiye, KfW Development Bank, KOSGEB and The Ministry of Industry and Technology, Turkish Employment Agency, Presidency of Migration Management, Turkish Red Crescent, Development and Investment Bank of Türkiye, Ziraat Bank, International Labour Organization (ILO), The International Centre for Migration Policy Development (ICMPD), The Union of Chambers and Commodity Exchanges of Türkiye (TOBB) have attended the meeting.

At the meeting, information was provided on the number of jobs created and retained within the scope of the project since the last Steering Committee Meeting on January 30, 2023, as well as progress made within the scope of both support mechanisms, capacity development, and other project activities. The meeting concluded after receiving opinions and comments from stakeholders.

Adjustment for the First Monitoring Period

Within the scope of Empowering the Private Sector Foster Social and Economic Cohesion in Türkiye (FOSTER) Project Employment Committed SME Support Programme, conditions have been relieved for SMEs that are having difficulties in fulfilling their employment commitments due to the inability to complete work permit processes during the first monitoring period.

Within the scope of the revision, on an exceptional basis and only in the first monitoring period, beneficiary SMEs with less than 40 SSI premium days (but equal to or higher than 1 SSI premium day) for each new employee will be deemed to have fulfilled the 40 days eligibility criteria if they can prove that the work permit application procedure (duration between work permit application and approval) has taken more than 30 calendar days. In any case, the amount of support payment is calculated according to the number of SSI premium days verified via the SSI database.

New Flexibility for SMEs to Fulfil their Employment Commitments for the First Period

The first monitoring period of the Employment Committed SME Support Programme has started on December 1, 2023 within FOSTER Project. A new flexibility has been introduced for SMEs that cannot fulfil their employment commitments in the first period. The flexibility will enable these enterprises to benefit from grant support.

According to the programme, SMEs were required to commit employment of two persons for micro-scale grants and four persons for small-scale grants. The support process for SMEs that could not fulfil their commitments was being terminated.

In accordance with the revision made, SMEs that fail to fulfil their employment commitments in the first monitoring period will be able to benefit from the support in the second monitoring period, provided that they fulfil these commitments in the second monitoring period.

According to the revision, the upper limit of support for SMEs that will benefit from the programme starting from the second monitoring period will be TRY 375.000 for a commitment to employ two people and TRY 750.000 for a commitment to employ four people.

This flexibility will only apply for the first monitoring period. For SMEs that do not fulfil their employment commitments in the second monitoring periods, the support process will be terminated.

While the favorable loan provided through the FOSTER Project Employment Committed SME Finance Support Programme supports the cash flow of many enterprises, the loan’s significance for some SMEs is much greater.

One of them is Mahmut Eriş’s company in Şanlıurfa, which produces thousands of bottles of perfumes and fragrances per month. According to Eriş, the enterprise’s owner, they purchased raw materials with the loan shortly before the earthquake, which accelerated their recovery after the disaster.

Mahmut Eriş used to be a builder, but when the market conditions in the construction industry changed, he began looking for a new venture and discovered perfumery. Initially, Mr. Eriş studied perfume production and opened a perfume store in Şanlıurfa. He began production in 2015 and now produces 70 thousand bottles of perfume, 7,000 car fragrances, and 25,000 ambient fragrances per month.

They also opened stores in Samsun and Bursa as their business grew, and used the loan provided by the programme to purchase raw materials and bottles for about 3-4 months. Eriş emphasizes that the region’s businesses suffered the most from financial difficulties following the earthquake, and adds, “FOSTER Project just hit the spot for us at that time.” We gradually began production around 20 days after the earthquake.” Eriş also claims that sales are currently recovering, but that they have yet to begin selling to their old customers in Adıyaman, Kahramanmaraş, and Hatay.

Mr. Eriş explains that the project loan drew them in because of its long maturity and subsidized interest rate / profit share, and that it also contributed to their cash flow. Mahmut Eriş also plans to export. The company’s initial focus will be on the Iraqi market, but it is also looking into export opportunities in Uzbekistan and Egypt.