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Small and Medium Enterprises (SMEs) have significant importance in the Turkish economy as well as in the economies of many developing and developed countries. 99.5% of businesses operating in Turkey can be classified as SMEs. These companies provide employment to approximately 64% of workforce and contribute about 36% to the GDP.

SMEs have very significant share in the Turkish economy, but are easily affected by the changes in competitive and technological environments as well as alterations in rules and regulations governing business applications and economic activities. Because of advantages due to their lean organizational structure, SMEs can respond to changes faster than larger corporations. However, there are various disadvantages, such as managerial shortcomings caused by lack of professional managers and skilled employees, problems in the process of institutionalization, deficiencies in management information systems, and insufficiencies of capital, all of which are caused by an organizational structure common to all SMEs. Therefore, Basel II, one of the most important issues of the financial system in Europe, has been the center of attention of both credit companies and SMEs in Turkey, since this risk-based credit rating system will have radical effects on the types, limits, costs and terms of credits to be used by SMEs.