Loan Demand from Enterprises Expected to Rise in Q2: CBRT

According to the Central Bank of the Republic of Turkey (CBRT), the demand for corporate loans is expected to continue increasing into the second quarter of 2025, supported by a gradual loosening of lending standards for businesses.

The insights come from the Q1 2025 Bank Loans Tendency Survey, which also highlighted evolving trends in retail lending, funding conditions, and loan segmentation by enterprise size and currency type.

Slight Easing in Lending Standards for Businesses

The survey found that in Q1 2025, bank lending standards for enterprises began to ease slightly overall. However, a more detailed breakdown revealed diverging patterns:

• Standards for loans to large enterprises and FX-denominated loans saw a slight tightening.

• Standards for loans to SMEs and domestic currency loans began to ease.

Banks anticipate this easing trend will persist in Q2, making credit more accessible for non-large corporate borrowers.

Retail Lending: Easing Persists, but Some Tightening Ahead

In the retail segment:

• Lending standards for housing and vehicle loans continued to ease slightly in Q1.

• A more notable easing was observed in other personal loan categories.

For Q2 2025, banks forecast:

• Weak continuation of easing in housing and auto loans

• A slight tightening in non-housing, non-auto personal loans

Loan Demand Shows Strength Across All Categories

The survey revealed a broad-based increase in loan demand from businesses during Q1, with all loan types showing growth. This trend is expected to strengthen further in Q2, driven by:

• Improved funding conditions

• Anticipated easing in lending standards

In the retail sector, demand for housing and other personal loans is projected to increase further, while the decline in vehicle loan demand is expected to slow down.

Funding Conditions Continue to Ease

Both domestic and external funding conditions continued to ease during Q1 2025, according to the survey. Banks expect this trend to persist into Q2, helping support broader credit activity and reducing pressure on lending costs.

Conclusion: Positive Momentum in Credit Markets

With credit standards easing, demand increasing, and funding conditions improving, the Turkish loan market is set to remain active and dynamic in Q2 2025. However, diverging trends between corporate and personal loan segments signal the importance of targeted policy responses to sustain balanced growth.