Despite the size of its economy, capital markets in Turkey are relatively shallow, with limited liquidity; a deepening of the markets is needed. Debt securities are mainly government and bank-dominated and have little room for private businesses.

On the other hand, the bank loan market in Turkey is very deep, steady and well structured, with more experienced lenders and borrowers. Consequently, bank loans are preferred over debt securities by most market players.

Other advantages of incurring indebtedness through loan markets in Turkey are as follows:

• bank loans offer different types of facilities (eg, revolving and bridge loan facilities);

• bank loans are accessible to more businesses, whereas debt securities are generally used by more sophisticated parties;