Turkish Lending Hits 28.1 Trillion as Bad Loans Climb

What Happened

The Risk Centre of the Banks Association of Türkiye published its monthly bulletin for June 2026, covering lending by banks and non-bank financial institutions.

Total lending

Cash loans rose 37 per cent year on year to 28.136 trillion lira. Of that, 26.99 trillion came from banks, with the remainder from leasing, factoring and financing companies.

Commercial share

Commercial loans grew 35 per cent to 21.2 trillion lira, representing 75 per cent of the total. Three quarters of credit is flowing to businesses rather than households.

Currency composition

Lira loans rose 41 per cent to 11.22 trillion; foreign currency loans rose 28 per cent to 9.99 trillion. FX loans account for 47 per cent of the total — a material exposure to exchange rate movement.

Non-performing loans

Loans under legal follow-up reached 961 billion lira. As a share of total lending the ratio rose 0.7 points over the year to 3.3 per cent.

What the Numbers Mean

Volume growth is neither good nor bad on its own. The meaning appears when you look at where it went and whether it is coming back.

Expansion with deteriorating quality

A 37 per cent increase in volume alongside a 0.7 point rise in the NPL ratio suggests part of this credit is funding continuity rather than expansion. That distinction does not appear on a balance sheet; it appears in behaviour.

Manufacturing holds the largest share

Within commercial lending, manufacturing accounts for 31 per cent, followed by wholesale and retail trade at 19 per cent and above. Credit is concentrated in production and distribution.

Construction and retail carry the highest NPL ratios

Both sit at 4.2 per cent, the highest of any sector. Read alongside the 6 per cent contraction in construction output over the same period, the picture is internally consistent.

Currency mismatch is widespread

FX loans reach 83 per cent of total borrowing in some sectors. A business earning lira while owing foreign currency carries balance sheet risk independent of interest rates.

Who This Affects, and How

Credit conditions do not mean the same thing to every counterparty. What matters is what the borrowing funds.

Those positioned well

Firms with sound balance sheets borrowing for capacity investment benefit from wider access; expansion in volume improves the odds of approval. Manufacturing and export-oriented businesses also sit in the priority band of credit allocation.

Those exposed

Businesses earning lira while holding FX debt are vulnerable to currency movement, and with FX at 47 per cent of lending this exposure is common. Construction and retail counterparties face tighter assessment given the 4.2 per cent NPL ratio in their sectors.

Those not directly affected

Debt-free service businesses with short cash cycles are insulated. For them the bulletin is a risk indicator for reading customers rather than themselves.

The indirect chain

Anyone selling into sectors with rising NPL ratios should revisit collection risk. If you supply construction or retail counterparties in Turkey, payment terms deserve review against this data.

What to Do About It

A period of expanding but more expensive credit is not a reason to rush a borrowing decision. It is a reason to structure it properly.

Define in writing what the borrowing funds

Covering a cash gap and financing capacity investment are different actions. The first repeats; the second repays. Making the distinction before approaching a lender also strengthens the conversation.

Measure currency exposure now

If revenue is in lira and debt in foreign currency, the balance sheet carries a risk that is separate from the interest rate. With FX at 47 per cent of lending, this calculation is frequently skipped.

Set payment terms by sector

NPL ratios sit at 4.2 per cent in construction and retail. If you sell into those sectors, terms and security arrangements should reflect that.

Plan investment alongside the demand side

Financing machinery without building the demand to fill it leaves capacity idle. An investment plan needs to cover production and demand together.

The Digital Side

Lenders assess what a business does; so do customers. Both increasingly verify from the same place.

Corporate visibility affects financing too

Credit assessment reviews a firm’s activity, references and continuity. A site that has not been updated in years suggests a business that has not moved in years.

Returns are measured on the demand side

Capacity added without demand generated produces no revenue to service the debt. The first question in any digital consulting engagement is usually the same: who fills the new capacity?

Measurable demand makes debt plannable

Knowing monthly enquiry volume and conversion rate lets a repayment schedule rest on data. Without it the schedule is an assumption.

Export revenue offsets currency risk

For a business with FX debt, foreign currency income is a natural hedge. Multilingual site infrastructure is the lowest-cost step toward building it.

A Solid Digital Foundation

Financing decisions run long, and so does digital infrastructure. When the two are planned separately, the cost of capital goes unmatched by returns.

Borrowing creates an obligation to grow

Credit generates growth pressure; growth requires demand; demand requires visibility. If one link is missing the others do not compensate.

Technical foundation and search visibility

Site speed, mobile performance and structured data are the baseline criteria for search visibility. Google publishes its criteria in the Search Central documentation.

No measurement, no investment plan

Without enquiry volume, conversion rate and acquisition cost, the payback period on any investment is unknown.

Ready infrastructure converts credit faster

A business with infrastructure in place begins growing the day the facility draws down; one without it builds infrastructure first while interest accrues throughout. Growing through a downturn treats this sequence as the starting point.

Frequently Asked Questions