Essay: Women entrepreneurship in Turkey

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Economic growth does not necessarily provide increase in employment. Therefore, governments particularly follow job creating policies to reduce unemployment and inequalities. Promoting entrepreneurship is a healthy and effective way of job creation and consequently increasing labor force participation.
Entrepreneurship concept attracts growing attention of both developed and developing countries. The measures taken so far to close gender gap between men and women were successful but not enough. World Bank data reveals that unemployment and labor force participation rates are not equal between genders in the world, or even in the high income countries.
One of the Millennium Development Goals is “Promote Gender Equality and Empower Women by 2015”. Women empowerment is deemed to be a strong tool for poverty reduction. Generating income for women provides gender equality in the household and society. Equally sharing prosperity promotes economic growth and development, increases stability.
Turkey, being a large scale and fast growing economy in Europe has also young and fast growing population. (Footnote: 7th biggest economy after the Netherlands; most populous after Germany. Source: Wikipedia) Increase in higher education attainment among women raised the awareness for discrimination against women. Last decades, Turkey made significant progress towards empowerment of women by policy, constitution or legislation changes.
This essay is mainly focused on the women entrepreneurship situation in Turkey since there is substantial room for improvement, and especially the concrete initiatives to promote the same.
Human development and gender equality is still an issue in Turkey. In 2013, Turkey ranks 69th according to United Nations Development Program (UNDP) Human Development Index and Gender Inequality Index. Although there was significant improvement in 2012 compared to previous year, improvement in 2013 is negligible.
UNDP explained the high level of equality as: This is particularly due to women’s woefully low level of participation in politics and in the labor force, as well as women’s lower level of secondary education compared to men.
Labor force participation is an important component of Gender Inequality Index and means the percentage of working-age persons (15 and above) in the economy who are either employed or unemployed and looking for a job. Employment rate represent persons in employment as a percentage of the population of working age (15-64 years). Employment rate includes both formal and informal employment.
World Bank report published in 2009 describes the importance of women labor force participation with the studies at times then: “Recent studies indicate that some developing economies, especially in the Middle East and North Africa, display lower participation rates than those predicted by women’s age and education structures. If female labor force participation in such countries rose to the level predicted by women’s age and education structure, household earnings could increase up to 25%.”
World Bank (2009). Female Labor Force Participation in Turkey: Trends, Determinants and Policy Framework. Report No: 48508-TR. World Bank, Washington, DC.
1.a – Historical Trend
Urbanization in Turkey started in the middle of last century. Share of urban population reached to 75% today, compared to 25% in 1950s. Women who have been employed in the agricultural sector, had difficulties finding jobs in the urban areas due to a number of reasons.
Özbay, Ferhunde (1994). Women’s Labor in Rural and Urban Setting. Boğaziçi Journal – Review of Social, Economic and Administrative Studies 01/1994
Last decades, services sector became the primary source of increasing demand for female labor. Improvements in the educational attainment of women after 1990s, as a result elevated age of marriage, reduction in fertility and the increase in retirement age are believed to reverse the negative trend in women participation. Tunalı and Başlevent (2006) state that “low labor market attachment of women merges as a major differentiating feature of the Turkish labor market… yet… there is strong evidence that labor force participation rates rise sharply with education and increased schooling that delays marriage”.
Tunalı, İnsan & Başlevent, Cem (2006). Female Labor Supply in Turkey. In Altuğ S. & Filiztekin A. (Eds.) The Turkish Economy: The Real Economy, Corporate Governance and Reform, (pp.92-121), London and New York: Routledge.
Today, Women Labor Force Participation (WLFP) is still low in Turkey. WFLP rate is stagnant until 2008. Since then there is significant progress and the gap between men and women is closing. (Figure 1)
Figure 1 — Labor Force Participation Rate in Turkey (2014-2013)
Source: TurkStat, Household Labour Force Statistics (HLFS)
Figure 2 — Unemployment Rate in Turkey (2014-2013)
Source: TurkStat, HLFS
However, unemployment rates do not display the same trend (Figure 2). Table 1 shows that unemployed women number has increased more than employed. Footnote: This may be explained by unregistered unemployment in the past became registered. A simple calculation with 2013 figures conclude that 10% increase in the labor force participation would mean 2.5 million more women employed, ceteris paribus.
Table 1 — Labor Force Indicators in Turkey — Women (2004 — 2013)
WOMEN 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Working Age Population – Ages 15 and Older (million) (a) 24.29 24.69 25.08 25.48 25.86 26.32 26.74 27.27 27.77 28.20
Employed (million) (b) 5.05 5.11 5.26 5.36 5.60 5.87 6.43 6.97 7.31 7.64
Unemployed (million) (c) 0.62 0.64 0.66 0.66 0.73 0.98 0.96 0.89 0.88 1.03
Labor Force (million) (d) = (b) + (c) 5.67 5.75 5.92 6.02 6.33 6.85 7.38 7.86 8.19 8.67
Labor Force Participation Rate (d) / (a) 23.3% 23.3% 23.6% 23.6% 24.5% 26.0% 27.6% 28.8% 29.5% 30.8%
Unemployment Rate (c) / (d) 11.0% 11.2% 11.1% 11.0% 11.6% 14.3% 13.0% 11.3% 10.8% 11.9%
Table 2 — Labor Force Indicators in Turkey — Men (2004 — 2013)
MEN 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Working Age Population – Ages 15 and Older (million) (a) 23.25 23.67 24.09 24.51 24.92 25.37 25.80 26.32 26.95 27.41
Employed (million) (b) 14.59 14.96 15.17 15.38 15.60 15.41 16.17 17.14 17.51 17.88
Unemployed (million) (c) 1.76 1.75 1.67 1.72 1.88 2.49 2.09 1.73 1.64 1.71
Labor Force (million) (d) = (b) + (c) 16.35 16.70 16.84 17.10 17.48 17.90 18.26 18.87 19.15 19.60
Labor Force Participation Rate (d) / (a) 70.3% 70.6% 69.9% 69.8% 70.1% 70.6% 70.8% 71.7% 71.0% 71.5%
Unemployment Rate (c) / (d) 10.8% 10.5% 9.9% 10.0% 10.7% 13.9% 11.4% 9.2% 8.5% 8.7%
Source: TurkStat, HLFS
1.b – Global and Regional Comparison
When WLFP rate of Turkey is compared with rest of the world, the only outcome is obvious room for progress.
Turkey WLFP rate is the lowest third in The Group of Twenty (G20) countries. (Figure 4) Footnote: G20 is a key platform for international economic cooperation and decision making, started in 1999 by 20 major economies of the world.
Furthermore, it is also significantly lower than the average of developing European and Central Asian countries.
Figure 4 – Women Labor Force Participation Rate in G20 Countries and Denmark (2013)
(*) Developing European and Central Asian countries
Source: World Development Indicators (WDI)
However, evolution of the rate is not that unfavorable. Figure 5 depicts the historical WLFP rates compared to South European countries that resemble. Last decade, Turkey had better progress than Italy and Greece, and similar progress with Spain.
Figure 5 — Women Labor Force Participation Rate in South Europe (2004 — 2013)
Source: World Development Indicators (WDI)
TurkStat’s latest Household Labor Force Statistics indicate that woman employers’ share in the employment increased to 8% in 2013, from 7.5% in 2012.
European Commission’s study shows that only 15% of the entrepreneurs in Turkey are women.
Footnote: The same proportion is 31% for EU-28
Women entrepreneurs are often comprising employers or business owners with at least 30% share, top managers, self-employed with or without employees.
Turkey Entrepreneurship Strategy and Action Plan (2015-2018)
According to OECD (2008) entrepreneurs are those persons (business owners) who seek to generate value, through the creation or expansion of economic activity, by identifying and exploiting new products, processes or markets.
Ahmad, N. and R. G. Seymour (2008), “Defining Entrepreneurial Activity: Definitions Supporting Frameworks for Data Collection”, OECD Statistics Working Papers, No. 2008/01, OECD Publishing, Paris.
Global Entrepreneurship Monitor (GEM) is joint project between Babson College-USA and London Business School-UK.
Total early-stage Entrepreneurial Activity (TEA) ratio of GEM compares the entrepreneurship level of 82 countries. (Footnote: TEA Definition: Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business)
Turkey’s TEA ratio is 10% and ranks 5th in the group of 24 European Union countries plus Turkey. Unweighted average of EU countries is 7.9% where Eastern European countries take the lead. However, Turkey’s women TEA ratio is 6.3% and ranks 10th. (Women TEA of EU is 5.6%.) This number reflects that women entrepreneurs in Turkey left behind of their peers.
In the next section, possible reasons of this situation will be explored.
Barriers to women’s employment are not unique to Turkey and here they are classified as familial obligations, social benefits, cultural resistance, labor market conditions and access to finance.
Results of Demographic and Health Survey (2013) made by Hacettepe University announced in late 2014. Respondents’ answers for “main reason for not working” are summarized below.
Table x — Main Reason for Not Working
Married Women Women with Child
Housewife 29.4% 29.7%
Caring for children 27.6% 29.5%
Partner/Family does not allow to work 17.4% 16.4%
Does not need/want to work 7.6% 7.2%
Disabled/Sick 4.2% 4.7%
Looking for job/unemployed 4.1% 4.0%
Other 9.7% 8.5%
Hacettepe University Institute of Population Studies (2014), “2013 Turkey Demographic and Health Survey”. Hacettepe University Institute of Population Studies, T.R. Ministry of Development and TÜBÄ°TAK, Ankara, Turkey
3.a- Familial Obligations
Most of the working women faces the difficulty of balancing their work and familial obligations. Traditional division of labor at home affects women labor force participation decision at particular stages of life.
Unmarried and married Turkish women have different priorities while seeking jobs. World Bank’s Female Labor Force Participation in Turkey report (2009) finds that “married women first seek a job covered with childcare benefits whereas for unmarried women health insurance and pension benefits are their first priority.”
In Turkey decent and reliable childcare is rare to find and the reliable ones are very expensive. A very recent report by World Bank for Turkey finds “a mismatch between expectations and reality when it comes to child care in 3 key areas (i) accessibility and location, (ii) prices and willingness to pay and (iii) quality of services and expectations of quality.”
World Bank. 2015. Supply and demand for child care services in Turkey : a mixed methods study. Washington, D.C. : World Bank Group
3.b- Social Benefits
Turkish G20 Presidency’s 2014 Employment Plan sees the social benefits provided to the underprivileged as a challenge for employment: “Social benefit receivers maintain their lives via social benefits, the difficulty to access to the labour market create a vicious cycle of poverty and social exclusion. There is an inadequacy in the effective inter-institutional cooperation and managing systems to enhance the employability of beneficiaries and their participation of those into the labour market who are eligible to work. Social protection system is composed of passive benefit programmes and is not designed to promote employment.”
G20 Employment Plan 2014 – Turkey
3.c- Cultural Resistance
Like many others in the world, Turkish women are traditionally expected to be housewives and take care child or elderly regardless of their level of education. Owning a business or working outside home is still perceived to be against society’s values.
Lack of support from the family is a main source of discouragement. In Turkey, even though women have a work before getting married, they tend to quit their jobs after being married or having child.
3.d- Labor Market Conditions
The labor market in Turkey is more flexible today but has not reached the desired level. Temporary, part-time or work-at-home type of works are not built-in the labor market or social security system yet.
Gender segregation in the labor market, meaning separating those deemed “women’s work” and “men’s work”, has continued to increase the concentration of women in particular sectors and professions. (KEIG 2013) Women have continued to primarily work in services sector, in labor intensive manufacturing sectors and agriculture. Gender segregation has also been observed in promotions and work sharing.
KEÄ°G. (2013). Women’s Labor and Employment in Turkey: Problem Areas and Policy Suggestions II. Women’s Labor and Employment
Furthermore, pressure of large number of unemployed men, existence of informal economy and possibility of quitting due to family reasons keep the price of female labor low.
3.e- Access to Finance
The World Bank and OECD prepared a progress report to G20 about women and finance (2013). As the report states: “Women are less included in the formal financial sector than men, especially in developing economies, even after controlling for individual characteristics like income, education, and age.”
The report classifies the constraints to women’s financial inclusion as demand-side and supply-side barriers. On the demand-side; low levels of financial literacy and capability, time and mobility constraints, poor access to information and networks, cultural and gender norms, limited access to education, employment and entrepreneurship are listed. Supply-side barriers are; legal and regulatory barriers, financial infrastructure weaknesses, gender biases in financial institutions’ practices and finally financial products, marketing and delivery that are not gender sensitive.
A recent report made public by the European Parliament points out that finance providers hesitate because of the following reasons:
• Women tend to set up businesses that are female-dominated and these markets perceived to have low growth potential,
• Women tend to ask for smaller amounts and longer terms which mean lower returns,
• Women have less business experience than men.
Access to finance in Turkey is known as a major barrier to establish small business both for women and men. However, the structure of formal finance system requires collateral and this requirement affects women entrepreneurs more. As a result, they borrow lesser amounts and less frequently than men (Cindoğlu, 2003).
Cindoğlu, Dilek (2003). Women’s Microenterprise Activity. In Bridging the Gender Gap in Turkey: A Milestone Towards Faster Socio-economic Development and Poverty Reduction. World Bank.
Özar (2007) lists the main problems entrepreneurs face: “Tax rates, dealing with tax administration, unutilized capacity, low demand and securing initial capital were cited as the most difficult problems both by women and men entrepreneurs.”
Özar, Şemsa (2007). Women Entrepreneurs in Turkey: Obstacles, Potentials and Future Prospects. Retrieved from
These problems are also related to the fact that most women who attempt to start businesses do not have sufficient experience and education.
On the other hand, familial obligations of women have an impact on the businesses they choose. The activities performed by the women are mostly limited to home-based activities such as raising livestock, laundering, sewing and retail trade in their neighborhood. (Özar 2007). These areas are usually less attractive to the banks.
4.a- Better and Flexible Labor Market Conditions
Gender equality in employment gained importance in Turkey’s public policy framework since 1990s. MoFSP officials list the major legal reforms last decade as constitutional amendments and changes in the Civil Code, Labor Law and Penal Code. Accession negotiations started in 2005 with European Union and the screening process between 2005-2006 created a momentum towards gender equality, not only in the labor market but in all areas of life.
In 2011, paid maternity leave period and social insurance coverage are extended.
Feride İnan & Güneş Aşık, (2015). Making Economies Work for Women: Female Labour Force Participation in Turkey. TEPAV.
MoFSP officials state that Prime Ministry circular in May 2010 titled “Increasing Female Employment and Ensuring Equal Opportunities” is another milestone.
Among other things, the circular calls for (i) the principle of gender equality to be core principle in for all government policies, strategic plans and employment procedures of public institutions, (ii) to prepare an equal opportunity impact assessment report when a legislation change is proposed and (iii) monitoring the childcare facility obligations of public and private institutions.
4.b- Training & Technical Assistance
There are many training programs initiated by public or private institutions. For example, KOSGEB reached to about 127,000 women with Applied Entrepreneurship Training (AET) between 2010-2014. (Turkey Entrepreneurship Strategy and Action Plan-TESAP) Program aims at training potential entrepreneurs to develop their business ideas and business plans. Footnote: AET program is minimum 60 hours and free of charge. (KOSGEB website — citation ???)
As a new initiative, in April 2015, Ministry of National Education (MoNE) announced “Women First at Entrepreneurship” training program for 10,000 women.
MoNE also works on adapting entrepreneurship concept to fundamental education system. (TESAP)
Almost all of the public or private initiatives with financial support includes training, consultancy or technical assistance modules. Footnote: These will be mentioned briefly in the coming sections.
Furthermore, technical courses, vocational trainings, etc. by MoNE and Turkish Employment Agency İşkur are complementary for educational needs of entrepreneurs.
4.c- Turkey Entrepreneurship Strategy and Action Plan (2015-2018)
“Turkey Entrepreneurship Strategy and Action Plan-TESAP” is published in the Official Gazette in July 2015 after a comprehensive consultation process with stakeholders. (Citation; used before) Footnote: This is the second strategy and action plan. The first one was covering 2014-2016 period.
Small and Medium Enterprises Development Organization (KOSGEB) has coordinated the process. TESAP targets:
• Developing an entrepreneur-friendly regulator environment
• Supporting innovative entrepreneurship
• Developing and implementing a sustainable incentive system in general and for women, young, environmental, social and global entrepreneurship
• Enhancing the entrepreneurship culture
• Expanding the early-age entrepreneurship education and developing consultancy system for entrepreneurs
• Easing the access to finance
64 actions in total defined under these strategic targets. 4 of these are related to women. First, regulatory framework will consider women entrepreneurship perspective. Second, “Women Entrepreneur Ambassadors” project will be extended. Third, education need for women will be analyzed. And finally, research will be carried out for women entrepreneurs’ problems.
4.d- Access to Finance
Starting from late 2000s, Turkey put a special emphasis on the support to entrepreneurs. As of today, incentives from public funds, venture capital, angel investors for start-ups, public or private bank funds, capital markets, leasing or factoring and credit guarantees are the major tools for financing of entrepreneurial activity in Turkey.
On the other hand, “Financial Access, Financial Education and Financial Consumer Protection Strategy and Action Plans” were announced in June 2014. Strategy aims to enhance financial inclusion through education and awareness rise, and also improve the quality and use of current financial products.
In the next section, some of noteworthy public or private initiatives with financial support particularly to women entrepreneurs will be overviewed in details.
4.d.i- Major Public Initiatives with Financial Support
(1) Entrepreneurship Support Program-KOSGEB
KOSGEB introduced the Entrepreneurship Support Program in 2010. KOSGEB enumerates motives and objectives of the program as (i) disseminating the entrepreneurship culture, (ii) establishing successful and sustainable enterprises and (iii) developing entrepreneurship by establishing the Business Improvement Centers (BICs). (Used before)
The program includes delivery of financial support for new businesses, training sessions for entrepreneurs who have a business idea and establishment of the BICs, the local incubation centers for those who need office space in the start-up stage. The program does not particularly support women but there is positive discrimination.
There are three components of this program: Applied Entrepreneurship Training, New Entrepreneur Support and BIC Support.
New Entrepreneur Support is in the form of loan or grant to the graduates of Applied Entrepreneurship Training or similar programs, and owners of enterprises in the BICs. KOSGEB gives priority to innovative, high value-added and export oriented business ideas.
The third and last component is BIC Supports in the form of grant. This component targets municipalities, universities, special administrations, development unions, professional organizations and non-profit organizations who want to establish and manage their own business incubators. Business incubators provide consultancy, networking, site and shared equipment and services at early stages of enterprises. Footnote: Number of BICs increased from 13 in 2013 to 16 in 2014.
KOSGEB data below shows positive but insufficient progress.
Table – Performance Indicators of ESP
2013 2014
Number of women entrepreneurs who benefited from New Entrepreneur Support 3,992 4,632
Number of women specific training programs 115 85
Share of women entrepreneurs in BICs 29% 31%
Total financial support to women entrepreneurs (million TL) 38.4 48.9
Share of women entrepreneurs in financial support 45.6% 46.3%
Source: KOSGEB Annual Reports (2013 – 2014) and Performance Program (2015)
From the figures above, average support amount is calculated as TL9,620 and TL10,550 for 2013 and 2014. With historical exchange rates these amounts equal to about $5,000, well below the limits.
(2) Support for Income Generating Projects-MoFSP
The support program run by the Ministry of Family and Social Policy (MoFSP) as a poverty relief instrument to eliminate dependency on social aid. The program defines its mission as social inclusion of the poor, turning them into productive individuals, ensuring sustainable income through projects in the urban or rural areas.
Eligible projects should require skills, be labor intensive and fit the local conditions technically and economically. The relevant product or service should have local sales and marketing potential. According to 2014 Annual Report of MoFSP, crop and livestock production, agro-processing, hairdressing, dressmaking, catering, turnery, plumbery are typical projects for support.
Ministry of Family and Social Policy Annual Report (2014)
The loans are so-called soft loans, with 8-11 years of maturity without interest.
Table x – Performance Indicators of SIGP
Year Number of Projects Number of Beneficiaries Allocated Budget (million TL)
2007 2,535 4,251 25.46
2008 4,018 7,782 57.17
2009 3,398 7,869 66.88
2010 1,571 4,060 35.39
2011 538 1,156 66.48
2012 646 12,143 (*) 13.52
2013 681 1,576 18.16
2014 504 784 10.38
Total 13,891 39,621 293.45
(*) General Directorate of Social Assistance experts explain the peak in 2012 beneficiaries number as a complication of database transfer.
Source: Ministry of Family and Social Policy Annual Report (2014)
From the historical figures above, average budget allocation for projects is TL21,125
Footnote: Approx. $13,000 with the 2007-2014 average exchange rate; 1,63TL/$
In order to assess the contribution of the program to social inclusion, MoFSP and the Boğaziçi University concluded an impact analysis study in December 2014. However, results are not published yet.
(3) Human Resources Development Operational Program-MoLSS
Ministry of Labor and Social Protection (MoLSS), developed a program called “Human Resources Development Operational Program” to increase efficiency in the labor market. There are two projects prevailing under this program.
Promoting Women’s Employment Operation: One of the priority axis of the Operational Program is employment and under this axis the first measure is to promote women’s participation into the labor market, and increase female employment, including those formerly employed in agriculture. Within this framework, İşkur undertook “Promoting Women’s Employment (PWE) Operation” project during 2009-2013 period.
Including the grants provided by the European Union, budget of the project is about â,¬27 million. Geographical target of the project is east half of Turkey where labor force participation is low.
Evaluation report of the MoLSS states that “in total the 131 PWE projects implemented 615 activities out of which 56% represent training and motivation activities. Only 19% of activities were related to the promotion of entrepreneurship.” Other activities involve raising awareness, supporting services, field studies and promoting social dialogue.
Footnote: Primary areas of the projects are child or elderly care services, traditional handicraft manufacture and food/beverage processing. Some of the outstanding projects selected by İşkur are; “Employment Project for Young Women in Beekeeping — Bingöl”, “Win Your Bread out of Silk – Hatay”, “Labor Force Training Center for Textiles Industry — Tokat” and “Employment Project for Women in Fish Cooking — Van”.
Like most of the other initiatives, there is no impact assessment study or follow up mechanism about the project.
Footnote: It is revealed that 131 women became entrepreneur.
Child Care Support: Another EU—Turkey co-financed support program is launched in March 2015 by Social Security Institution (SSI) of MoLSS. Women Employment Support by Child Care Services at Home Project is a pilot project to be run in three provinces. SSI will pay â,¬300 each month to the working mothers with child younger than 2 years old, in order to increase women’s labor force participation.
Target of the project is to support 5,000 mothers directly and 5,000 baby-sitters indirectly. Again, 85% of the project budget will be financed by EU grant. The volume of the support is expected to reach to â,¬38 million by the end of project term, i.e. September 2017.
4.d.ii- Major Private Initiatives with Financial Support
(2) Turkish Grameen Microcredit Program-TISVA & Grameen Bank
Turkish Foundation for Waste Reduction (TISVA) and Grameen Bank founded a joint venture and established its first branch in Diyarbakır, the biggest city of South East Turkey in 2003.
Footnote: Grameen Bank is a Nobel Peace Prize-winning microfinance organization and community development bank founded in Bangladesh. It makes small loans (known as microcredit or “grameencredit”) to the poor people without asking collateral. The name Grameen is derived from the word gram which means “rural” or “village” in the Sanskrit language. (Source: Wikipedia)
According to Turkish Grameen Microcredit Program (TGMP) website, all of TGMP’s borrowers are low-income women for several reasons:
• “Turkish society tends to offer less economic opportunity to women, and TGMP seeks to reverse this tendency;
• Countless studies cite the importance of women’s role in household budgeting and family financial stability, which in turn have an effect on family health and other social indicators;
• The experience of the Grameen Bank in Bangladesh, whose model TGMP adopted, suggests that women are loyal to their debts, making them an excellent population to invest in.”
Table x – Performance Indicators of TGMP
2007 2008 2009 2010 2011 2012 2013 2014
Number of TGMP Branches 15 32 56 65 76 100 104 108
Cumulative Number of Loans Disbursed 7,397 16,556 29,077 40,467 53,770 69,520 74,988 171,759
Cumulative Amount of Loans Disbursed (million TL) 9.6 20.1 41.2 74.1 122.0 183.0 273.7 375.5
Cumulative Amount of Loans Disbursed (million $) 7.4 13.2 27.1 48.8 64.5 107.6 161.0 220.9
Source: Data provided by Turkish Grameen Microcredit Program Ankara office
Program’s initial basic loan limit is TL1,000 (approx. â,¬300) for the first year. If the recipient repays the loan in 10.5 months, they become eligible for additional TL1,000 every year. TGMP Ankara office representatives indicate that program achieved high repayment rate. Repaid amounts are used for new loans, thus provide sustainability for the program.
(2) The First Step Credit-Halkbank
Halkbank is a major bank in Turkey that focuses on loans to SMEs. Footnote: Majority share of the bank is owned by government and remaining 49% of the shares are publicly traded.
In 2013-2014, the bank introduced a line of credit to women entrepreneurs that do not have collateral. Semi-public Credit Guarantee Fund (CGF) of Turkey provided guarantee to the bank for these credits.
Initial target was to give credit to 1,000 new establishments or newly established ones in the last year. Women present their business plans to the bank and the qualified applicants gets 5 year credit up to TL95,000 (approx. â,¬30,000). Levels of experience, education and training affects the amount of financing.
Line of credit closed in mid-2014. The qualified businesses are mostly in services sector, like preschools, catering, dry cleaning etc. Limit of the program was â,¬30 million but a total of â,¬4 million of financing is provided to 620 establishments, which is about 13% of the limit. MoSFP experts claim that extensive paperwork and heavy conditions of CGF limited the interest for entrepreneurs.
(3) Finance and Advice for Women in Business-EBRD
In October 2014, European Bank for Reconstruction and Development (EBRD), Delegation of the European Union to Turkey, MoLSS of Turkey and İşkur launched a new program called “Finance and Advice to Women in Business”. EBRD implemented the program first in Turkey.
Under the program, women-led SMEs will be supported by the financial package of â,¬300 million provided by EBRD to six banks in Turkey. Other parties, European Union and Turkish government will join with a 38 million Euro additional support and technical assistance services between 2014-2020.
Footnote: Some of the banks like TEB announced additional contribution to the program from their own resources.
Besides access to finance, the program provides women in business seminars, business advice, business coaching, industry expertise, entrepreneurial skill courses and mentoring.
The EBRD estimates “the program will help more than 15,000 Turkish female entrepreneurs, creating some 21,000 new jobs”
The operation started early in 2015 and initial results will be taken by the end of 2015. The program will run for three years.
Starting from 1990s, there were many attempts to indicate the profiles, characteristics and problems women entrepreneurs by local or country-wide surveys. Better understanding would lead to correct policy suggestions. In this section, findings of two most recent surveys will be elaborated.
5.a – Middle East Technical University (METU):
METU academicians conducted a survey in 2014 among 304 women entrepreneurs supported by Turkish Garanti Bank’s loans. According to survey, the main problems while establishing the business are; implementing the work, access to finance, administrative burden, being a woman and finally the balance between business and family life.
The results of this survey reveal some updates about women entrepreneurs’ profile:
• Age: Average age is 43.
• Level of education: 61% women that own their businesses has bachelors or master’s degree. Footnote: Women think that source of their courage of owning a business is their higher education compared to others.
• Personal Characteristics: Being independent, determined and ambitious is the most selected choice (31%)
• Marital status: 72% of entrepreneur women are married.
• Decision to establish a business: 51% of women decided themselves, 31% decided with their husbands or established it with the support and help of their family.
• Founding capital: Their primary source of capital is internal funds. Then comes, 42% their families and 24% bank credit.
• Feature of Women’s Enterprises
o 82% of women entrepreneurs work at services sector. 40% of the total operates in trade and sales businesses.
o 70% of these enterprises are micro (less than 10 employees), %29 is small (less than 50 employees) and less than %1 is medium (less than 250 employees) size enterprises.
5.b – Women Entrepreneurs Association of Turkey (KAGIDER):
In order to have a better idea about profiles and experiences of women-led enterprises, a survey is conducted among the members of KAGIDER in September 2015. Footnote: KAGIDER is among the prominent women’s NGOs, founded in Istanbul in 2002 by 38 successful women entrepreneurs and is a nation-wide, non-profit civil society organization. Today, KAGIDER has over 200 members.
With the invaluable contributions of KAGIDER, the questions were determined as: (i) the sector they operate, (ii) employee size of enterprise, (iii) education level of the women leaders, (iv) way of starting business, (v) use of internal funds, (vi) use of bank loan, (vii) major constraints they faced during the operation and (viii) employment growth.
Although the scope of the survey kept brief, number of fully or almost fully answered surveys remained low because of the long religious holiday. Data collected from 47 women-led enterprises with 1,994 employees in total are summarized below.
Sectoral Distribution:
Almost half of the enterprises questioned operate in textiles and clothing. Share of the services sector looks small. Reason may be the fact that survey only includes the enterprises with 5 or more employees. Large number of micro businesses in the services sector might change the distribution.
Textiles 12 25.5%
Clothing 10 21.3%
Metal Products 4 8.5%
Food 4 8.5%
Mineral Products 4 8.5%
Chemicals 3 6.4%
Retail and Wholesale 3 6.4%
Plastics and Rubbery 2 4.3%
Hotel and Restaurants 2 4.3%
Others 3 6.4%
Most of the enterprises fall into micro or small size by number of employees. Only 21,3% may be considered medium scale enterprises as they employ 50 or more.
Average employee number of the surveyed enterprises is 43.2.
5 – 9 Employees 16 34.0%
10 – 24 Employees 10 21.3%
25 – 49 Employees 11 23.4%
50 – 99 Employees 4 8.5%
100 or More Employees 6 12.8%
Total share of higher education is 46.8% and lower than the other survey’s finding. Taking the low higher education attainment for females in Turkey into account, 12.8% share for the Master’s Degree or more is particularly notable.
Primary School or Less 8 17.0%
Secondary School 17 36.2%
University 16 34.0%
Master’s Degree or More 6 12.8%
Vast majority of the women entrepreneurs (76.6%) founded new establishments individually or with partners. Others joined and now lead the family firm.
New Establishment 36 76.6%
Joined Family Owned Firm 10 21.3%
Bought Establishment 1 2.1%
Use of Internal Funds:
Half of the women entrepreneurs rely entirely on internal funds. The rest is scattered between 10% and 80%.
91% or More 24 51,1%
61% – 90% 6 12,8%
31% – 60% 7 14,9%
30% or Less 8 17,0%
No Answer 2 4,3%
Use of Bank Loan:
Majority of the women entrepreneurs did not use bank loan at the start-up phase. Internal funds may be favorable or bank loans do not have better conditions due to lack of collateral.
Not Borrowed 28 59.6%
Less than 25% of the Working Capital 8 17.0%
25% – 50% of the Working Capital 9 19.1%
More than 50% of the Working Capital 2 4.3%
Women-led enterprises cited tax rates as the biggest constraint for their business operations. Then comes the political instability and practices of competitors at the informal sector.
Tax Rates 10 21.3%
Political Instability 8 17.0%
Informal Sector Competitors 8 17.0%
Other Problems 5 10.6%
Quality of Workforce 4 8.5%
Access to Finance 3 6.4%
Electricity 2 4.3%
No Answer 7 14.9%
Employment Growth:
Final question is about growth. 36.2% of the respondents cite that there’s been no change in the number of employees. 53.2% of the enterprises experienced an increase. However, overall increase is limited (4.2%) since many large scale enterprises are downsized.
Increased 50% or More 8 17.0%
Increased 25% – 49% 6 12.8%
Increased 1% – 24% 11 23.4%
No Change 17 36.2%
Decreased 1% – 24% 1 2.1%
Decreased 25% – 49% 2 4.3%
Decreased 50% or More 2 4.3%
Not effective or efficient yönünde çok kısa bir değerlendirme (3-4 cümle) ve aşağıdaki öneriler
Lack of data makes analysis difficult
Lack of coordination or follow up
Lack of overall impact assessment
Targeted initiatives good but must increase
Some of barriers are structural and difficult to overcome; needs political ownership
Cooperation with NGO’s should continue

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