Determinants of the credit volume in the Turkish banking sector

Researching the factors affecting bank loans in Turkey, which has a financial system based on the banking sector, is of great importance in terms of revealing the economic dynamics. From this point of view, it is aimed to determine the factors affecting the bank loan volume in Turkey in the thesis study. Within the scope of the research, macro and micro determinants of bank loans in Turkey were examined within the framework of two different models. In this framework, quarterly data for the period 2010Q1-2022Q3 were analyzed using the ARDL method. In the macro model, the effects of economic growth, public debt and stock prices, and in the micro model, the effects of equity capital, bank bonds and bills issues and non-accuring loans on credits are examined. Results for the macro model revealed that among the indicators, the economic growth rate has the most significant positive effect on loans. The effect of public debt amount and stock prices on loans remained at a low level. Thus, it has been determined that the growth process has significantly expanded the bank credit volume strongly. Findings related to the micro model, on the other hand, revealed that equity capital and bank bond and bills issues have a positive effect on credits, while non-accuring loans have a negative effect. While the equity capital variable has the biggest effect among micro indicators, the effect of bank bond and bills issues and non-accuring loan on credits remained at a much lower level. Based on the findings from the macro and micro models, some key policy inferences can be made. Accordingly, it is seen that policies aimed at increasing the economic growth rate at the macro level will create an important dynamic in the volume of bank credits in Turkey. On the other hand, practices that improve bank equity at the micro level are another basic policy option that will create a dynamic in the development of the credit volume offered in the banking sector.