Erdogan Makes Cheap Loans a Central Plank in Campaign Trail
- Risks to Turkey’s banks rise as state pushes for cheap credit
- Regulator says lenders have enough buffers to withstand shocks
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Turkey’s government is making cheap credit a key part of its campaign, pushing banks to take on greater risks in an economy that’s already teetering on the brink of recession.
President Recep Tayyip Erdogan’s administration is urging state-owned lenders to extend cheap loans to industries spanning agriculture to soccer clubs and help consumers pay off their credit cards or get below-market interest rates on mortgages. The government hopes this will force other banks to come to the party after they pulled back on extending credit to deal with billions of dollars in debt-restructuring requests and a growing pile of bad loans.