KOSGEB SME Digital Transformation Support Program: Requirements and Application

For businesses in the manufacturing sector looking to make a technological leap, KOSGEB’s SME Digital Transformation Support Program opens the door to modern industry. Offering businesses a broad financing range from 1 million TL to 20 million TL, this program also covers a large portion of the interest burden in order to minimize financing costs.

With the digital transformation/maturity report, the foundation of the application process, the program sets a strategic roadmap; with a 24-month implementation period and up to 36 months of tenor, it paves the way for sustainable growth.

📌 Quick View: SME Digital Transformation Support Program

What Is KOSGEB SME Digital Transformation Support Program?

SME Digital Transformation Support Program is a financing support model that enables businesses operating in the manufacturing industry to modernize their production processes with digital technologies. This program aims not only for businesses to purchase technology, but also to bring their efficiency and competitive strength up to international standards.

The program's core workings and standout features are grouped around three main pillars:

1. Financing Model and Interest Support

The program is based on loan interest support rather than a direct cash grant. Businesses obtain loans through banks that have signed protocols with KOSGEB (for example, İş Bankası and TEB). KOSGEB then covers a significant portion of the interest cost of this loan, non-repayably, up to the specified support points. In this way, the business gains access to an investment loan with a very low cost.

2. Strategic Roadmap: Digital Maturity Analysis

The most critical feature that distinguishes this program from other KOSGEB supports is that the application is based on a scientific foundation. Instead of businesses investing randomly, they are required to obtain a "Digital Maturity Assessment Report" prepared by authorized institutions such as TÜSSİDE (DDX), MEXT, or İHKİB. This report analyzes the company's current status and scientifically identifies which digitalization steps (ERP, IoT, Artificial Intelligence, etc.) should be taken.

3. Support Scope and Investment Items

Expenditures to be made under the program must be "new" (brand new). Second-hand devices are not supported. The main support items are as follows:

• Hardware and Infrastructure: Servers, sensors, industrial robots, and network devices.

• Software: Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), manufacturing execution systems (MES), and data analytics tools.

• Services: Consulting for software commissioning and integration processes.

In short: This program is a "smart" incentive mechanism that both eases the financial burden of the industrialist on the digitalization journey and ensures investment in the right technology.

In this section of the article we prepared for the "expert", let us enrich the technical information you provided with a slightly more visionary perspective and make the reader feel the answer to the question, "Why should I join this program?"

Here is the content that elaborates the program’s purpose in a professional tone:

What Is the Purpose of the Program?

The core philosophy of KOSGEB SME Digital Transformation Support Program is not just to finance the purchase of machinery or software; it is to prepare the SMEs that form the backbone of Turkish industry for "The Production Standards of the Future".

The program's core objectives can be summarized under three main headings:

1. Increasing Global Competitiveness

In line with our country’s national and international economic goals, the aim is for local businesses to speak the same technological language as their giant competitors in the global market. A digitalized SME becomes a player that sets standards not only in the local market but also across export channels.

2. Improving Efficiency and Optimizing Business Processes

The goal is to make business processes more transparent, measurable, and error-free. By transferring manually tracked processes to digital systems;

• Production costs are reduced,

• Resource waste is minimized,

• Operational efficiency within the business is maximized.

3. Increasing the Share of Value Added in the Economy

Increasing the share of small and medium-sized businesses in the economy in qualitative terms rather than quantitative terms is one of the program's main focal points. A business that has completed its digital transformation multiplies the value it brings to the national economy by moving from low value-added production to the "Smart Manufacturing" model.

Expert's Note: This program aims to integrate your business not only into today, but also into the digital ecosystem that Industry 4.0 and beyond will bring. In other words, this is not an expense; it is a strategic signature for the future.

What Are the Application Requirements?

To benefit from the opportunities of KOSGEB SME Digital Transformation Support Program, businesses must meet certain sectoral, financial, and technical criteria. Before moving on to the application process, make sure you meet the conditions below:

1. Sectoral and Scale Requirement

• Manufacturing Sector Focus: According to your business's NACE code, it must operate in the C-Manufacturing sector.

• Business Class: The program is open only to Small and Medium-Sized enterprises (SMEs).

2. KOSGEB Registration and Database Status

• Your business must be registered in the KOSGEB Database and be in active status.

• The KOSGEB Business Declaration, containing the most up-to-date financial data, must be approved and current.

3. Digital Maturity Report (Most Critical Requirement)

Random investment plans are not accepted under this program. Before applying, you must have received services from authorized consultants of TÜSSİDE (DDX), MEXT, or İHKİB and have one of the following reports in hand:

• TÜSSİDE – DDX Digital Transformation Assessment Report

• MEXT/İHKİB – SIRI Digital Maturity Assessment Report

4. Financial Adequacy Criteria

To prove your business's economic sustainability, you are expected to meet at least one of the following two financial conditions:

• The total of the last 3 (three) fiscal years' "Operating Profit" must be positive,

• Or the **"Total Equity"** for the last fiscal year must not be negative.

Important Note: If your equity is negative in your financial statements or if you do not have operating profit in the total of the last three years, it would be beneficial to review your financial structure before applying to the program.

Understood, let us enrich the topic with financial details and the application process and turn it into a complete guide for the reader. Here is the continuation of the article:

Support Amount, Tenor, and Financing Details

The most attractive aspect of this program is that it minimizes SMEs' cost of access to financing. When planning your investment, you should consider the following figures:

• Support Ceiling: A credit facility between at least 1 million TL and at most 20 million TL is offered per business.

• Tenor Structure: A tenor option of up to 36 months is provided so you can spread your investments over time.

• Program Duration: The implementation period of projects under support is set at 24 months.

• Repayment: While the principal of the loan is repaid by the business, most of the interest/profit share burden is covered by KOSGEB.

Step-by-Step Application Process: How to Apply?

It is critically important to follow the sequence below to complete the process without errors:

1. Preparation and Registration

First, make sure your information in the KOSGEB database and your SME declaration are up to date. If the information is not current, the system will block your application.

2. Digital Maturity Analysis

If you have not done so yet, contact the authorized institutions (TÜSSİDE, MEXT, or İHKİB) and obtain your Digital Maturity Assessment Report. This report will form the basis of your project.

3. Online Application

Enter the project details, report results, and your investment plan into the system via the KOSGEB E-SME system. The suitability of your application will be reviewed by KOSGEB experts.

4. Bank Process and Approval

Businesses that receive preliminary approval from KOSGEB apply to protocol-signed banks with a credit request. With the bank's loan approval and KOSGEB’s final decision, your digital transformation journey officially begins.

Expert's Final Advice: Digital transformation is not just about buying software; it is a culture change. Presenting a realistic investment plan that focuses on the weaknesses identified in your report both increases the chance of approval and adds real value to your business.

SME Digital Transformation Support Components and Financial Limits

The expenditure items supported under the program and the financing limits provided for these items are detailed below. Businesses can launch the loan process through partner banks by planning their investments within these limits.

Financing and Implementation Table

KOSGEB Partner Banks & Support Point Explanation

Within the framework of the protocol signed with KOSGEB, you can carry out your loan applications through the following banks:

• TEB (Turkish Economy Bank A.Ş.)

• Türkiye İş Bankası A.Ş.

• Yapı ve Kredi Bankası A.Ş.

One suggestion for the expert: It may be useful to add a small note to the "Support Point" section. This 20-point support refers to the portion that will be deducted from the loan's interest rate and is paid directly to the bank by KOSGEB (meaning the business is relieved of that portion of the interest burden).

Legislation and Application Forms

You can visit the official link to access the program's current implementation principles, legislative details, and application forms:

👉 Click for KOSGEB SME Digital Transformation Support Program Details

Frequently Asked Questions (FAQ)

1. Is there a grant under this program? 

No, this program is not a direct grant (cash non-repayable support) program. However, the 20-point portion of the interest or profit share cost of the loan used is covered by KOSGEB. This provides a significant financial advantage for the business.

2. Is the purchase of second-hand machinery supported? 

No. Machinery, equipment, and hardware purchased under the program must be new (brand new).

3. Can the Digital Maturity Report be obtained from anywhere? 

No. Only reports obtained through the authorized institutions TÜSSİDE (DDX), MEXT, and İHKİB are valid. Having this report is a prerequisite for application.

4. Is there a time limit for application? 

The program is open for continuous applications. However, since evaluations are made within budget constraints and current protocols, businesses that already have their digital maturity report ready are advised to apply without delay.

5. Which banks can I use for a loan? 

Currently, the financial institutions with signed protocols are Türkiye İş Bankası, TEB (Turkish Economy Bank), and Yapı Kredi Bankası.