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.

FOSTER Project Supports SMEs in Their Recovery from the Earthquake

The conditions have been relieved for beneficiary SMEs in six provinces affected by the earthquake that occurred on February 6, 2023, within Employment Committed SME Finance Support Programme and Employment Committed SME Support Programme of Empowering the Private Sector to Foster Social and Economic Cohesion in Türkiye (FOSTER) Project which is financed by the European Union, managed by KfW Development Bank and implemented by KOSGEB.

SMEs operating in Adana, Gaziantep, Hatay, Kahramanmaraş, Kilis and Şanlıurfa will recover from the earthquake with the support within the Employment Committed SME Finance Support Programme and Employment Committed SME Support Programmes.

Employment Committed SME Finance Support Programme

Revision in 50% Job Creation Criterion in Six Provinces!

The requirement that at least half of the jobs committed shall be created, will be skipped in the earthquake affected project provinces, namely Adana, Gaziantep, Şanlıurfa, Kilis, Kahramanmaraş and Hatay. Loan recipient SMEs within Interest Rate / Profit Share Subsidy Mechanism in these six provinces will be free to fulfil their commitments through job retention or job creation.

Flexibility in SSI Premium Days

A minimum of 60 SSI premium days must be paid for the new employee in the relevant quarter in order for them to qualify as a “job creation” under the Programme. The condition is revised for the SMEs in earthquake affected provinces as “at least 30 SSI premium days shall be paid for the new employee in respective quarter” instead of 60 days. SMEs that make the 30 SSI premium days payment for each “retained” or “created” employment in respective quarter will be deemed to fulfil the employment commitment. There will be no control and comparison of the previous year’s average SSI premium days paid for retained employees.

Environmental & Social Compliance Monitoring Will Not Be Conducted Until August 31^st!

Monitoring for the Environmental and Social Compliance that has been planned to be conducted in Adana, Gaziantep, Hatay, Kahramanmaraş, Kilis and Şanlıurfa will not be conducted between February 6, 2023 and August 31, 2023.

Flexibility in Exclusion Criteria

SMEs failing to fulfil their employment commitments for two consecutive quarters are excluded from the Employment Committed SME Finance Support Programme. The amendment extends the exclusion period for the beneficiary SMEs in six provinces to four consecutive quarters (or twelve consecutive months).

Employment Committed SME Support Programme

Revision in Job Creation Criteria in Six Provinces

The requirement that at least half of the jobs committed shall be created, will be skipped in six earthquake affected project provinces; namely Adana, Gaziantep, Şanlıurfa, Kilis, Kahramanmaraş and Hatay. Winning SMEs within the SME Support Mechanism in these six provinces will be free to fulfil their commitments through job retention or job creation.

Flexibility in SSI Premium Days

Within the programme, SMEs are required to pay at least 80 SSI premium days for each created or retained employment within the respective 4-month period. The requirement has been reduced to 40 days for SMEs operating in Adana, Gaziantep, Hatay, Kahramanmaraş, Kilis and Şanlıurfa. SMEs in Ankara, Bursa, İstanbul, İzmir, Kayseri, Kocaeli, Konya, Mardin and Mersin shall pay at least 40 SSI premium days only in the first monitoring period instead of 80 for each employment. For the remaining monitoring periods, at least 80 SSI premium days is required to be paid in these nine provinces.

One-third of the total SSI premium days for the 12 (twelve) months prior to the announcement date of the call for proposals will not be applied towards the fulfilment criteria.

SMEs Have Shown Great Interest to the Employment Committed SME Support Programme

SMEs have shown great interest to the Employment Committed SME Support Programme, under the Empowering the Private Sector to Foster Social and Economic Cohesion in Türkiye – FOSTER Project. A significant amount of applications from SMEs with proposals under the main theme of “Improving Competitiveness and Employment” have been received.

SMEs submitted their proposals on capacity building, increasing market share, increasing the added value of the product and energy efficiency, product development and diversification, digitalization, transition to green production, and business-to-business (B2B) transactions.

Accepted project proposals within the Programme will receive financial support for personnel, machinery, equipment, moulds, software, and training costs. Eligible SMEs can obtain grant support up to 1 million Turkish Liras depending on their employment commitment. Employment will be supported for at least 2,788 people through the grant support for SMEs located in Adana, Ankara, Bursa, Gaziantep, Hatay, İstanbul, İzmir, Kahramanmaraş, Kayseri, Kilis, Kocaeli, Konya, Mardin, Mersin and Şanlıurfa. Employment will be supported through creation and retention of formal employment.

Timeline of Call for Proposals is Updated Within Employment Committed SME Support Programme!

The Employment Committed SME Support Programme within FOSTER Project continues after an interruption due to earthquake disaster that hit six project provinces. The independent committees formed for the second stage evaluation will evaluate the successful applications from the first stage.

The commencement date of implementation is August 1, 2023.

The updated Timeline of Call for Proposals is as follows;

TIMELINE
Activities	Date
Announcement of Call for Proposals	26.12.2022
Application	26.12.2022-27.01.2023
First Stage Evaluation	30.01.2023-08.05.2023
Administrative Check	09.05.2023-18.05.2023
Corrections by Applicant SMEs	19.05.2023-21.05.2023
Final Administrative Check	22.05.2023-23.05.2023
Second Stage Evaluation and Announcement of Second Stage Scores for Objections	24.05.2023-21.06.2023
Application for Objections	22.06.2023-23.06.2023
Reassessment	26.06.2023-12.07.2023
Board Evaluation for the Eligible Objections	13.07.2023-26.07.2023
Ranking and Awarding	27.07.2023-31.07.2023
Implementation Start	01.08.2023*
First Monitoring Period	01.12.2023
First E&S Monitoring Period	01.12.2023-01.02.2024
Second Monitoring Period	01.04.2024
Third Monitoring Period	01.08.2024
Fourth Monitoring Period	01.12.2024
Second E&S Monitoring Period	01.08.2024-01.10.2024
Closure of SME Support Mechanism	01.03.2025

* The commencement date of implementation for SMEs claiming they are unable to involve in support process in Hatay and Kahramanmaraş is 01.01.2024. The monitoring schedules will be determined based on the relevant commencement dates. 

More than Thousand SMEs Attended Information Meetings!

FOSTER Project team met more than a thousand SMEs at the Information Meetings that took place between December 2022 and January 2023.

SMEs were informed about the Employment Committed SME Support Programme and the Employment Committed SME Finance Support Programme through sixteen meetings held in Adana, Ankara, Bursa, Gaziantep, Hatay, İstanbul, İzmir, Kahramanmaraş, Kayseri, Kilis, Kocaeli, Konya, Mardin, Mersin and Şanlıurfa.

SME representatives were informed on the specifics of both programmes and addressed their questions to the Project Staff about the terms and conditions. 

Mustafa Badıllı (54) shares his entrepreneurial journey as the first agricultural machinery producer in Şanlıurfa. He has a degree in elementary education and founded his own business after identifying a need in the market and spending years learning the trade as an apprentice and journeyman. Mustafa Badıllı, managing a company that produces 15 thousand agricultural spraying machines a year, says that they enlarged their machine park and purchased raw materials with the loan they used via the FOSTER Project.

He says that creating Badıllı Makine ve Tarım was primarily driven by the desire to create jobs and support the national economy through production and exports. However, Badıllı claims that since they started the business, finding qualified employees has been their biggest challenge. During the Covid 19 pandemic, they also had trouble supplying raw materials because of the high cost, but as the demand for food increased, their operations sped up and they began to operate at full capacity.

The effects of the earthquake according to Badıllı, are as follows: “We had dealers in the earthquake region therefore, our business volume has decreased. Our production facilities kept operating without any damage but we lost one of our employees to the earthquake. As a result of our lack of motivation during daily operations, we fell behind in production.” In order to quickly reverse the negative effects of the earthquake, he draws attention to the financial requirements of the local businesses.

Badıllı’s goal is to “increase production capacity, establish additional production facilities, diversify export countries and increase employment”. Badıllı emphasises, “The subsidy has contributed to the purchase of raw materials and machinery,” claiming that the FOSTER Project’s long maturity and low interest rate/profit share attracted them. We anticipate that these initiatives will continue to support the growth of SMEs engaged in production and export.

Güven Elektrik, which is an Ankara based firm producing high voltage electrical materials, intends to expand through new investments. Zeki Tavas, company owner, explains that after moving their operations from Şanlıurfa to Ankara, they expanded internationally.

Zeki Tavas (50) is a second generation entrepreneur who describes himself as a person with high entrepreneurial and competitive spirit. Tavas relocated his business from Şanlıurfa to Ankara in an effort to establish himself as a leading figure in the industry. He describes their growth in the sector as follow: “Our trade volume has significantly increased since we arrived in Ankara. This enabled us to access international markets. We seized the opportunity to take part in significant projects in Türkiye and abroad. We are very happy with what we have achieved so far.”Tavas states that they produce high voltage mobile transformers, high voltage power lines and transformer insulators, and they are working with major investors and contractors in Türkiye. They are also selling to markets in Africa and the Middle East.

Güven Elektrik has the following future goals: “We are planning to make a new investment for high voltage power lines and insulators. With regard to the advent of electric cars, one of our future targets is to produce solar panels and industrial batteries.”

Tavas acknowledges that the loan provided by the Employment Committed SME Finance Support Programme within the FOSTER Project has been very helpful for their business since it offers 50% subsidized loans. Tavas explains the benefits of the Project loan as follows: “The loan helped us increase our employment and business development capacity. It supported our cash flow by decreasing our production cost.”  

İsmail Salih Tatlıoğlu, a 34-year-old entrepreneur, founded Tepe Baca ve Havalandırma Sistemleri in 2019. It stands out in the sector by producing stainless chimneys for the construction industry. İsmail Salih Tatlıoğlu previously worked for another construction firm, and now he intends to expand his business by promoting his brand both in Türkiye and abroad.

İsmail Salih Tatlıoğlu emphasises the significance of being the only company in Ankara with a product range of stainless steel chimneys, waste separation systems, and ventilation ducts produced. He initially hopes to establish dealerships in Turkey and abroad.

Tepe Baca ve Havalandırma Sistemleri has currently 19 employees and is exporting waste separation systems to Iraq. Tatlıoğlu states that the interest rate and profit share they received through the FOSTER Project helped them become more competitive in the industry. The low interest rate and profit share allowed for the purchase of raw materials by cashing in postdated checks, according to his description of the project’s benefits. “It has increased market competition, which has accelerated our business.” He continues.  

Esma İşel (53) praises the women touch in the furniture industry as an objective and aesthetic point of view. Having worked as a calibration specialist, control engineer and mechanical engineer for many years in different companies, İşel has now started to work at T En Enerji; a family-run company that produces kitchen tables, chairs and coffee tables. İşel, who became a partner in the family business with the support of her brother, says that they purchased raw materials with the loan provided within the scope of the FOSTER Project.

After graduating from Mechanical Engineering Department at Erciyes University in 1991, she got her master’s degree on solar energy in 1997. She is justifiably proud of being the first woman in Turkey to publish a calibration thesis. İşel stands out in the male-dominated furniture sector thanks to her training in quality control and personal development. Undertaking a responsible position in human resources, finance and corporate relations, İşel notes that women are shy in the sector; as a result, she encourages them to complete job-related trainings they desire and to follow the relevant support offered through various programmes.

T En Energy faces difficulties in purchasing raw materials therefore, they used the loan to buy raw materials such as pipe profiles. She emphasizes that low interest rate/profit share and long-term maturity are the loan’s most significant benefits.

İşel provides in-depth details about the issues they encountered as a result of the rise in container prices during the Covid 19 pandemic and also mentions that the transportation processes took a very long time. Additionally, she mentions the effects of the earthquake as follows: “After the Kahramanmaraş earthquakes, stores suffered field damages, and our current orders were cancelled. The supply of raw materials and pipe profiles was affected the most by the earthquake, especially due to damage to a particular factory”.She registered the Bystol brand of her company with the European Union, and her next objective is to “own the Turquality brand.”

After working for a furniture company, Alper Karaman, 46, who graduated from the business administration programme at Mustafa Kemal University, began his entrepreneurial journey in 2019. Karaman describes how the support he received from the FOSTER Project helped his business grow. Alper Karaman was born in Kayseri which is the hub of furniture industry in Türkiye.. In the course of his entrepreneurial journey-which he started by selling his home-Karaman now produces furniture like bunk beds, dressing room cabinets, foldable portable tables, refrigerators, large metal office supplies, and wheeled tools.

Karaman, who is also the Türkiye distributor of a foreign lock manufacturer, decided to follow his entrepreneurial dream after gaining experience for 13 years in various fields from production to planning. With the help he received from the FOSTER Project, he bought a welding machine and opened his own static paint shop in the machine park. The low interest rate, profit-sharing, and simple repayment terms of the loan, according to Karaman, allowed them to start mass production instead of pre-contracting dyeing and cut costs.

Engaging in exporting activities and planning to open a new factory in Dubai, Duayen Yapı channeled its interest rate/profit share subsidy to R&D activities. Şengül Şahan, Domestic Sales Manager of Duayen Yapı, talks about their operations in production of insulation materials, paints and glues and adds “Our main driving force is to become a world-class and eco-friendly company that will represent our country in the top-tier in the construction, defense and industrial fields.”

Duayen Yapı has been established in 2015 and has 60 employees, 35 of whom are women. Şengül Şahan states that they produce various paints with polyurethane and epoxy-based insulation materials, but the fire paints that are produced in R&D centers are one of the most unique products, as they prevent fire’s spread up to 120 minutes. She emphasizes that polyurea product groups, which garner a lot of interest, particularly from the defense industry and the military, serve as a shield against bombs, weapons and missiles and have a significant impact in the industry. Duayen Yapı has two factories in Tuzla Free Zone and production lines in Dudullu where they export their products to 70 countries. Şahan emphasizes how crucial it is for them to collaborate with 17 Chemical Engineers in the R&D centres and explains how they used the loan from the FOSTER Project Employment Committed SME Finance Support Programme to increase their R&D efforts, boost the company’s technical capacity, and simplify domestic and international payments.

Ümit Özgül learned metalworking with his father at a very young age and expanded his business following his graduation of mechanical engineering. He currently works with liquid cargo storage companies in Turkey’s busiest ports, and he says that they used the loan provided by the FOSTER Project, to pay for materials, relieving them of the financial burden.

Explaining that they operate in sheet metal forming, laser cutting, bending, welding, painting, assembly, maintenance, and modification areas; Özgül adds they currently appeal to larger masses by improving the small-scale works with the new bending and laser machines purchased. Ümit Özgül had 15 employees in the 2010s; today, they have more than 80; however, they are having difficulty finding qualified workers in the industry.

Özgül states that although the earthquake had no effect on their operations, their business volume has decreased as a result of the COVID-19 pandemic.  According to him, the loan’s appeal was due to its “long-term maturity, monthly installments, and low interest rate/profit share opportunity” within the Employment Committed SME Finance Support Programme. Since they are earning money through progress billing, the loan relieves them of pre-financing obligations, and they intend to grow gradually but steadily. They also plan to complete projects like the liquid cargo tank and pipelines in two major ports without using intermediaries.