The Dynamic Relationship Between Business Loans and Macroeconomic Variables in Türkiye: An Empirical Analysis

Understanding how monetary conditions and credit dynamics shape business lending is essential for evaluating firm financing and macroeconomic performance in bank-based economies such as Türkiye. This study investigates the effects of money supply (M2), credit expansion, and selected macroeconomic and financial variables on business loans in Türkiye by using quarterly data for the period of 2006Q1–2025Q3. On the grounds of using an ARDL cointegration framework, the analysis finds evidence of a long-run equilibrium relationship among the variables. The results show that credit expansion has the strongest and most statistically robust association with business loans in both the long run and the short run, whereas the effect of money supply appears to be more indirect; it also appears to operate through broader credit conditions. The findings also indicate that business lending is influenced not only by monetary conditions, but by the wider macroeconomic environment as well, including real economic activity, exchange rate conditions, and borrowing costs. Overall, the study provides updated evidence on the dynamics of business lending in Türkiye and highlights the importance of the credit channel in shaping firm financing conditions. From a policy perspective, the results suggest that sustaining productive business lending requires a coordinated policy framework that considers monetary, credit, and macroprudential conditions together.