Islamic banking can help boost SMEs

Reuters

ANTALYA: Islamic bank financing products could help solve financing problems of small- and medium-size enterprises (SMEs), Turkish Deputy Prime Minister Cevdet Yilmaz said.
Yilmaz, responsible for the economy, has acknowledged the rise of global SMEs and their increased penetration to the local domestic market.
Addressing the World SME Financing Forum in Turkey's Antalya province on Saturday as part of a G-20 summit, Yilmaz said that Islamic finance could play a vital role in addressing the funding challenges of SMEs.
“We believe that Islamic finance could play a vital role in addressing the funding challenges of SMEs which have been elevated since global financial crisis. Islamic finance can help promote better diversification of risks with its risk-sharing and asset-based financing principles.”
Yilmaz said the Turkey, under its G-20 presidency, has put huge emphasis on SMEs in 2015.
“With our determination, SMEs had the chance to make their voices better heard at the G20 platform. To tackle the financing challenges, the alternative market-based financing and regulatory and macro-prudential measures were explored under our agenda.”
Yilmaz said that SMEs are frequently underrepresented at major international platforms.
“Hence, we aimed to provide a convenient platform as a conduit to voice the expectations and concerns of the SMEs to the G-20.
“We have established the World SME Forum with the International Chamber of Commerce. This forum will advocate for SMEs’ interests globally, in cooperation with other international development organizations and play a key role in helping SMEs’ connection with global markets.”
He said: ”The private sector has a role in harnessing technology and adapting to consumer needs and the government in creating an enabling environment for financial access.”