Announcement

Applications for the Interest Rate/ Profit Share Subsidy Programme have ended as of 30 June 2023.

 FOSTER Interest Rate / Profit Share Subsidy Mechanism

Total interest rate / profit share subsidy amount allocated

EUR 30 million interest rate / profit share subsidy will be granted to SMEs having retained/created employment for eligible final beneficiaries.

Total amount of loans to be disbursed to SMEs.

EUR 200 million loans will be disbursed to SMEs under Interest Rate / Profit Share Subsidy Mechanism.

Number of beneficiary SMEs

At least 1.500 SMEs will be reached through the interest rate subsidy mechanism

Total number of created/retained jobs

At least 3.000 formal employment positions will be created/retained for final beneficiaries. Minimum 50% of these beneficiaries will be foreigners.

WHO CAN BENEFIT FROM THE PROGRAMME?

Small and medium sized enterprises (SMEs) operating in Ankara, Adana, Bursa, Gaziantep, Hatay, İstanbul, İzmir, Kahramanmaraş, Kayseri, Kilis, Kocaeli, Konya, Mardin, Mersin and Şanlıurfa may benefit from the Programme.

ELIGIBILITY CRITERIA for SMEs

An eligible SME

  • must be operating in one of the Project provinces listed above.
  • must be segmented as micro, small and medium-sized enterprises (SMEs) in line with the SME definition given in the decision of the Council of Ministers of Türkiye titled “Regulation on the Definition, Qualifications and Classification of Small and Medium- Sized Enterprises” numbered 2022/11828”and published in the Official Gazette on the 18th of March 2022.
  • must operate in Part C – Manufacturing sector or Chapter 62 – Computer programming, consulting and related activities sector or Chapter 72 – Scientific research and development activities sector as classified under Statistical Classification of Economic Activities in the European Community (“NACE Rev.2”).
  • must declare, at the stage of application to KOSGEB, non-involvement in similar programmes and in any BMZ or European Union (EU) funded FRIT I or FRIT II project or program for the same employment creation/retention commitment.
  • must be registered with active status in KOSGEB SME Information System (KOBI Bilgi Sistemi – KBS) and not banned from KOSGEB supports.
  • must have updated its SME information declaration form.
  • must comply with the “Exclusion List and Sectoral Guidelines of KfW Group” (Please click here to view the list)
  • Shall not be part of any European Union (EU) / United Nations (UN) sanctions list.
  • Must commit to formally create or retain employment for at least 1 (one) Turkish citizen and 1 (one) foreigner under temporary or international protection at the time of SME Loan application

EMPLOYMENT CRITERIA

LOAN SIZE LOAN AMOUNT EMPLOYMENT PERFORMANCE CRITERIA INTEREST RATE / PROFIT SHARE SUBSIDY AMOUNT
Large scale loans Between TRY 1.250.001 – TRY 2.500.000

4 Jobs retained / created:  At least 2 jobs shall be created.

(In the 6 earthquake affected provinces[1], beneficiary SMEs are free to fulfil the total employment number with created and/or retained jobs.)

 

50% of interest rate / profit share will be paid to the beneficiary SME in quarterly periods.

 

Small scale loans Up to TRY 1.250.000

2 Jobs retained/created:

At least 1 job shall be created.

(In the 6 earthquake affected provinces, beneficiary SMEs are free to choose the number of created and/or retained jobs.)

50% of interest / profit share payments will be reimbursed to the beneficiary SME in quarterly instalments.

 

 

  • In the respective instalment period, at least 60 SSI premium days must be paid for each employee within the employment commitment.
  • For the first instalment period, at least 30 SSI premium days must be paid for each employee within employment commitment.
  • For achieving the job retention target, eligible SMEs shall pay at least the same level of SSI premium days in the respective quarter compared to the average of last year (last 12 months period).
  • Job creation refers to the recruitment of a new employee not previously employed in the same company within 3 (three) months prior to the recruitment date.

IN THE 6 EARTHQUAKE PROVINCES, FOR ACHIEVING JOB RETENTION/CREATION TARGET IN EACH QUARTER, AT LEAST 30 SSI PREMIUM DAYS MUST BE PAID FOR EACH RETAINED/CREATED EMPLOYEE WITHIN THE EMPLOYMENT COMMITMENT PERIOD.

[1] Adana, Gaziantep, Hatay, Kahramanmaraş, Kilis, Şanlıurfa

IMPORTANT REMARKS

  • A loan agreement will be signed bilaterally with the on-lending bank and the beneficiary SME qualified for an eligible loan.
  • The loan maturity will be fixed at 24 months.
  • Loan instalments will be paid back in equal amounts in 3 (three) monthly periods.
  • Repayment of the loans will be made in equal amounts in 3 (three)monthly periods and will be depicted in the Loan Repayment Schedule annexed to the loan agreement.
  • Fulfilment of employment criteria will be monitored quarterly periods during the interest subsidy requests, in total 8 (eight) times during the programme.
  • If an SME cannot fulfil its employment commitment in any instalment period within the 24-month commitment period, one additional period is granted to it.
  • If an SME cannot fulfil its employment commitment for two consecutive periods (6 months), it is excluded from the programme and support payment is ceased whereas the loan relationship with the bank continues. THIS INTERVAL IS 4 CONSECUTIVE PERIODS (12 MONTHS) FOR THE SMEs OPERATING IN THE 6 EARTHQUAKE PROVINCES.
  • KOSGEB will continue to monitor the employment performance of SMEs excluded from the Project until the end of the repayment period by checking only the total number of employees.
  • SMEs will comply with the following issues with respect to the environmental and social requirements.
    • To respect the national environmental regulations
    • To comply with the national workplace health and safety regulations
    • To behave fairly and honestly towards its employees, to provide a safe and    healthy work environment for them, not to discriminate, to establish suitable working conditions for the disabled, not to exploit child labour
    • To use resources in an efficient way, take necessary measures to prevent environmental pollution
    • To refrain from taking actions that would negatively affect community health and safety
    • To pay attention to stakeholders’ views regarding the social and environmental risks that would affect the communities.
  • Beneficiary SMEs will be monitored for compliance with the environmental and social requirements. No monitoring will be made for the SMEs located in the earthquake provinces until August 2023.
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