Evaluatation of the credibility of SMEs in the corporate credit rating process in Turkish banking system

Along with having an important place in the financial setting in our country; the banking sector has also made a great progress in contributing to the development and growth of the economy in vital areas alongside contributing to sectors other than finance and their incorporation of such values in the sector. Banks have developed and grown with the experience and technology brought by historical processes, and have become the focus of the economy with the contribution of added value to the economies of countries. Banks undertake the important mission of transferring resources obtained from departments with surplus funds to those who request and require funds, and perform their main action - the lending. As much as it is profitable, the process requires a different approach since it involves various risks. Technological developments have not only contributed positively to the banks' capital, but also led to an adverse reaction. Once the economic systems started gaining an international dimension, analyzing the main function of the system – the lending activities, gradually formed a separate functional scope. Our study analyzes the SMEs'- which is an important part of the economic system- crediting functions, the stages of the credit process in general practice by the personnel, by determining the important points analyzing the crediting operational and credit weighted functions, balance sheet, income statement, obtaining general information about the company by using equity change statement data to reveal the real standing of the company by consolidating the quantitative and qualitative values with ratio analysis to determine the current and future credibility of the company and its risk factors. We also shed light on the aspect of the importance financial analysis related to the technical aspect or non-financial criteria data to be among the other points when considering the corporate loans. The study consists of three parts,and in the first part,banking ,Turkish Bankingsystem,types according to capital types ,bank credit,general principles and classifacation are mentioned. In the second part, the place of SMEs in the Turkish economy, their relations with banks, credit limit allocation processes, financing needs, determination of credit limits, transfer and purification processes in their balance sheets, obtaining rating grades from companies, operational activities and completion of the credit process cycle are mentioned. In the third part, the processes of evaluating the loan demand of a company operating in the manufacturing sector were examined by referring to the relevant processes, and a literature study was conducted on the subject. The criteria determined on the basis of the Central Bank of the Republic of Turkey Sector Balance Sheets and the literature were evaluated and interpreted separately. Within the scope of the General Applications of the System, the company's loan collateral status was determined according to the final score. Although the study contributes to the literature, it is thought that it will help SMEs operating in the sector in their lending processes.