“Credit guarantee fund is important to avoid bypassing the sector “
There are indications of an ongoing loan fueled growth recently in Turkey supported by the credit guarantee fund. This macroeconomic driven intervention is useful to relax potential in the fund-hungry real economic sector. The credit guarantee fund is important to avoid a bypassing of the banking sector in channeling consumer loans. What is more concerning is the afterwards. The economy will not be able to sustain longer than this year. Because 147 percent of loan deposit ratio is already an alarming level. Add to this the difficulty of asking people to start saving when people do not have the money to save in the absance of an immediate economic upswing won’t have a buffer to generate revenues, and the future looks less promising. So how much do we expect the future salaries to increase to allow payback? And if we dont have a short term upswing, those people won’t have a buffer to generate their revenues. Then this will be even more time delaying for consumer related growth in the future. While we all want to see an upswing in the Turkish economy, we might not see it immediately in the consumption because they will have to pay back their loans before they can spend their increased disposable salary.