Application of credit guarantee fund solving SMEs' financing problems: Case of Diyarbakır

The aim of this research is to investigate the financial problems of SMEs operating in Diyarbakir, financing techniques they use to solve these problems, the level of using these techniques, and to evaluate the effects of the Credit Guarantee Fund. This consists of four parts: In the first section, the definition, the features, the advantages, the disadvantages, the role and the importance of SMEs in Turkey and the world economy, and the causes of problems faced by SMEs; and in the second section resources utilized to solve the financing problems of SMEs is examined. In the third section, beside form the subject of credit guarantee funds, the types and the benefits, the implementation of Turkey KGF Inc.'s purpose of the organization, ownership structure, collateral requirements and performance indicators of utilization are discussed in detail. In the fourth section, the data obtained from 75 SMEs is analyzed by the SPSS 18.0. Frequency, chi-square and correlation tests were used. Finally, in accordance with the study findings, we will give suggestions to beneficiary. After analyzing, it is observed that the usage of CGF is low among SMEs and only 6 of 9 SMEs applied to fund benefited from credit guarantee services. In addition, a significant relationship between the problems of financing and financial planning is not found and, it is found by the results of tests carried out that, there is a positive correlation among financial planning and legal structure, activity area; a negative correlation with scale of SME. Also found a positive correlation among using bank loans and legal structure, annual turnover and a negative significant relationship between scales of SME.