Credit rating in Basel II process and effects on SME?s and demostrating on a SME operating in Denizli

Credit relationship between banks and real sector businesses, which are the essential parts of the national economies, consisting of small medium enterprises (KOBİ) have been changed intensively since 1990s with the development of international financial systems.Globalization along with the economic integration progress force local banks to make their duties in international standards. This makes the usage of ınternationally reconciled new credit rating systems necessary especially with abandoning traditional evaluation systems.It has been planning that Basel II capital adequacy accord which is working since the start of 2007 in G?10 countries, will come into force from 2009 in the other countries. Because of this, local banks required to carry out the regulations to make them prepared to Basel II transition period. It is expected to be carried out a more simplified approach used in calculation of credit risk named Standard approach. In the following period, while banks have improved their sub-systems to the minimum administrative level, they will be using more developed rating approaches.Keywords: Basel II, SMEs, Rating, Textile Industry