Microcredit for young entrepreneurs

01 Jul 2007

Turkish Economic Bank (TEB), United Nations Development Programme (UNDP) and Young Managers and Businessmen’s Association (GYİAD) is realizing a first in the world by implementing the “micro credit” business model for Turkish youth in the 18-35 age group who wish to start and grow their own business

New Horizons - Turkish Economic Bank, United Nations Development Programme and Young Managers and Businessmen’s Association have come together to lay the foundation of “micro credit” that will be granted to Turkish youth in the 18-35 age group -  a model that will be implemented for the first time. Young entrepreneurs who wish to start their own businesses or grow the existing ones will be supported through this project.

In the context of the implementation, among those who apply to start or grow their businesses, priority will be given to graduates of vocational high-schools, vocational colleges and women entrepreneurs.

In the context of the project that will be initiated in November with the partnership of TEB Business Banking, UNDP and GYİAD, credits will not be given in the form of grants. The project will contribute to pave the way to a production based investment and entrepreneurship in Turkey by bringing together  3 respectable and well-known institutions in their fields. The project is also the first example in the world in a way that it only aims at youth and due to the quality of the parties brought together.  

The credit applications that will be made to TEB branches will be evaluated by a “credit commission” consisting TEB, UNDP, GYİAD, representatives of universities and representatives of local trade and industry chambers. Trainings will be given by businessmen who are members of GYİAD to those whose credits have been approved thus supporting them in achieving success. In the context of the consultancy and support services that will be provided by GYİAD, trainings will also be given on business administration, business development and finance where necessary.Young entrepreneurs will be able to consult GYİAD in every step of their businesses and will be able to contact the company owners and managers by accessing the GYİAD members’ database.

In the context of the project that aims to support approximately 500 entrepreneurs a year, 15 million YTL worth of credit is being expected to be given in 3 years.

Youth will be able to start and grow their own businesses

The signing ceremony organised by TEB, UNDP and GYİAD for the Entrepreneur’s Credit was attended by Chairman of TEB Executive Board Yavuz Canevi, TEB General Director Varol Civil, UNDP Administrator Kemal Derviş and President of GYİAD Pınar Eczacıbaşı.

TEB General Director Varol Civil who touched on employment of the young population in Turkey and unemployment issues said “According to the February 2007 data in Turkey, there is a total of 4 million 324 thousand 282 people worth of work force. This figure means 17% of the total work force. However according to the February 2007 data 21.7% of this work force is unemployed. This is a large rate when compared to the European data and needs to be reflected on.” Civil who said “with this project, we will give these young people the opportunity to start their own businesses” stressed that there is no other microfinance project in the world that aims youth. TEB General Director Varol Civil said “this means that we have signed a project that will facilitate the lives of youth not only in Turkey but in the whole world with the support of our project partner UNDP that will  expand the project”.

Reminding that credits will not be given in the form of grants in this project, Civil, said “Different from previous implementations in Turkey, TEB aims to build an infrastructure that is sustainable and that has access to a wide range. The credit that we give should not be perceived as a one time donation. As TEB, we believe that it is essential for sustainable development to communicate the micro credit system to bigger crowds in a more corporate way in Turkey”.

Varol Civil stated that TEB is not a remote bank for entrepreneurs and that more than 90 thousand small businesses and owners of small businesses received service from TEB that was formed in 2005 in the context of Business Banking and that they know the needs of small businesses very well.

It will contribute to the country’s development

In the speech he made at the signing ceremony, UNDP Administrator Kemal Derviş stressed that the project mission is to support young entrepreneurs as well as proving that it is possible for them to gain profit in their own sectors taking into account the country development with the “Sustainable Business development Model” initiated by UNDP and with other studies by commercial institutions.

Derviş stated that as UNDP, they will give their support to the management of the project, carry their international expertise on micro credit to this project, help in the cooperation with local administrations, and contribute to trainings that will be organised in TEB by bringing international experts to Turkey thus engaging TEB in a line of business.

UNDP Administrator Kemal Derviş thanked TEB and GYİAD for their support in developing a strong micro credit system for the youth in Turkey and stated that TEB had contributed to the formation of a banking sytem in Turkey with international standards by providing a microfinance service especially to the marginal groups of the society.

Not knowing where to start is the biggest problem for the young entrepreneur

President of GYİAD Pınar Eczacıbaşı said “I would like to express my gratitude for the UNDP and TEB BNP Paribas officials for giving their support to this project and for carrying the project to this phase. As GYİAD, I believe that we are cooperating with the best partners in this field both in Turkey and in an international level and that we are creating a major opening for Turkey’s young population. I believe that the Micro Credit Project that was initiated in order to encourage youth into production and entrepreneurship will be successful and wish the best of luck for Turkey”.