What are SMEs in Turkey and what is their role in the economy?

Small and medium-sized enterprises (SMEs) are economic entities that are often emerging or in the process of growth and play an effective role in any local economy.

In the Turkish model, these companies as a whole represent the backbone of the economy, due to their great quantitative impact in moving the wheel of Turkey's economy, providing it with job opportunities, supporting the export sector, innovation, development, services, and many other areas that meet the needs of society and enrich the country's growth.

Definition of investment funds for small and medium-sized companies

Startup investment funds: These are those mutual funds that specialize in supporting small and medium-sized companies with promising projects that are expected to achieve high profitability returns in the long term, by contributing to the growth, support, and investment in these companies.

Types of investment funds for SMEs in Türkiye

There are different forms of investment in participatory funds in the field of small and medium-sized companies, and among the most famous models are:

Stock funds

These are funds that invest in startups or large, fast-growing companies, including accelerators and startup studios.

The process of investing in these companies is done by the fund by providing certain financial support to a company, in exchange for the fund owning specific shares in that company.

Debt funds

These are investment funds that invest primarily in debt instruments rather than equity, such as bonds and sukuk offered by these companies, with the promise of paying periodic interest and redeeming the principal when the bond matures.

Risk capital funds

These are funds that provide financial and technical support to emerging companies that are expected to achieve high financial profits, where the investment risk is high in exchange for achieving large profitable returns.

Advantages of investing in SME investment funds

The importance of investing in the field of corporate and project funds may not be less important than other investments, given the advantages and incentives they offer, the most important of which are:

1. The possibility of diversifying the fund's investment portfolio by supporting several ambitious or important projects at the same time enhances the chances of profit growth.
2. Innovative investment options with creative ideas are often offered by each of these companies.
3. These companies usually target emerging markets or uncharted territories, providing a fertile ground for investment.
4. Professional fund management and the ability to analyze project information will allow for better validation of the success of the backed project.

Challenges of investing in investment funds for small and medium-sized companies

But at the same time, these funds will face many challenges along the way, including:

1. High investment risk when companies fail in their projects or are exposed to various market fluctuations, which means losing the support amount.
2. Difficulty for the investor to liquidate his capital in the fund, compared to other types of funds.
3. The investment period is often long until the desired profits are achieved.
4. Low transparency in information about corporate projects.

5. For all things related to investment funds in Turkey, consult Oragon's experts

Investing in investment funds may be an encouraging area for many serious investors who want to grow their wealth and increase their profits, but the nature of this investment may raise many legitimate questions about the investment mechanism, risks, strategies, profit opportunities, and loss possibilities, in addition to the advantages and incentives provided by the funds or the Turkish state to investors in this field.

Therefore, we invite everyone interested in this type of investment to communicate directly with our team of skilled consultants in the field of investment fund management, where they will find adequate answers to all their inquiries, with the opportunity to learn about our ambitious investment funds and our rich options for developing your savings within the safest investment areas, in addition to learning about our various services in this field.

Edited by Oragon Company ©