Supporting Turkish MSMEs through COVID-19

Curfews and travel restrictions have left many micro, small and medium enterprises (MSMEs) in Turkey with severe losses in sales and struggling to survive.

We spoke with Yilmaz Odaci, Project Manager, of our Turkish member Habitat Association about how they’re supporting struggling MSMEs with digitalization and financial risk management through the  programme Supporting the survival and recovery of youth-led MSMEs in the wake of COVID-19, funded by Standard Chartered Foundation.

What is Habitat and what do you do?

Habitat Association is an NGO which develops and conducts social impact-oriented and capacity-building projects in coherence with the digital world. We promote sustainable development in technology, entrepreneurship and financial awareness among all segments of Turkish society. Since our founding in 1997, we have been committed to supporting disadvantaged groups in all 81 provinces of Turkey, regardless of religion, race, gender, sexual orientation or political views, to build capacities and access oppotunities to realise their full potential. We have a particular focus on promoting gender equality and empowering women to contribute to the economy. Through our multi-stakeholder partnerships with governments, local authorities, private sector companies and NGOs, we also make contributions to public policy at a local and national level.

What kind of entrepreneurs and businesses do you support?

Habitat provides information, networking opportunities, training, technological tools, mentoring and support to women, refugee and disadvantaged entrepreneurs and micro, small and medium enterprises (MSMEs). There are many benefits to joining Habitat programmes, but the most important is, and will always be, the opportunity to connect with like-minded people and businesses.

How has COVID-19 affected micro, small and medium enterprises (MSMEs) in Turkey?

In March 2020, Turkey confirmed the first cases of COVID-19 within its borders. The government then announced a four-tier system and local COVID-19 restrictions. Since then, Turkey’s provinces have been categorised into four different risk groups: low, medium, high and very high, based on infection and vaccination rates. Until today, we have a nationwide curfew between 9 PM and 5 AM. In very high risk areas, curfews span the entire weekend and people of certain age groups are only allowed to leave their home at certain times of the day. Travel within Turkey is also heavily restricted. Hospitality, retail and personal care businesses have to deal with reduced business hours as they are only allowed to open between 7 AM and 7 PM. All these restrictions cause severe sales losses for businesses in these sectors. In a survey conducted with 780 MSMEs from all over Turkey last year, 36% responded that they have suspended all business activities due to the impact of COVID-19. Over 50% of MSMEs stated that they lost more than half of their revenue. Only 3% of respondents stated that they were not impacted at all.

What support services are you offering to young entrepreneurs as part of the programme “Supporting the survival and recovery of youth-led MSMEs in the wake of COVID-19” funded by Standard Chartered Foundation?

Through the programme funded by Standard Chartered Foundation, we are offering Covid-19 recovery training to 600 MSMEs. The focus of the training will be on digital transformation and financial risk management. We will train them in e-commerce, digital marketing, budget and crisis management and more. Out of these 600 businesses, 30 will move on to our bootcamp and accelerator to build on lessons learnt at the training and receive further support with their transformation. It will be an intense 10 days of innovation thinking, needs analysis and developing financial and technical sustainability plans to create agile transformation. Those who successfully complete the programme will get the chance to pitch their plans to a jury who will choose six businesses that will be pitch  at the final  demo day. The three winners of the final pitch competition will receive a grant to implement their plans.

In addition, we will run 12 webinars to reach a further 1,000 MSMEs on topics such as digital communication, branding and government grant opportunities.

How do you think this support will help MSMEs in Turkey?

MSMEs in Turkey are underserved and their biggest challenges right now are accessing financing, offering their services and products online to offset sales losses and finding ways to reach customers despite the restrictions. We beleive our support provided through the Standard Chartered Foundation funded programme will increase the resilience of MSMEs across Turkey who have negatively been are affected by the COVID-19 pandemic. The programme will help them develop their digital marketing and budget management skills so they can digitize their operations and manage financial risks.

Habitat supports many refugee entrepreneurs. Can you tell me more about their specific challenges and how you support them?

The main challenges for refugee entrepreneurs include the language barrier, limited access to technological tools and information compared to Turkish citizens. They are also not familiar with the financial laws and processes in Turkey, this means they need more basic entrepreneurship training compared to their  Turkish counterparts . We provide this training in basic entrepreneurship, financial systems and technology. The goal is to increase their access to livelihood opportunities and empower them to contribute to the economy. We believe that this helps to create social cohesion in our society.

How do you think the situation for MSMEs in Turkey will develop over the course of 2021?

While the pandemic is ongoing and continuing to create uncertainty, we believe we will see more digital transformation of MSMEs in 2021. Supporting MSMEs to achieve this is a focus of our work this year. In addition, the Turkish Ministry of Industry and Technology announced that it will provide 1 million TL (Turkish lira) to support MSMEs with digitization. It’s great to see this kind of support coming from the government level.

To find out more about Habitat’s work, visit their website.