The crisis roiling Turkey’s investment industry may be spilling into its fast-growing corporate bond market, potentially crimping smaller companies’ access to financing. The turmoil triggered by Tera Portfoy Yonetimi AS and Pusula Portfoy Yonetimi AS last month, after they defaulted on redemptions has sparked steep outflows across the fund industry, slashing total portfolio value by 1.5 trillion liras ($30.3 billion), official data show.

That’s reducing funds’ capacity to take on more risk, investors say, particularly as some asset managers are also exposed to bonds from firms at the center of the crisis. The fallout has been most visible in stocks, wiping billions of dollars off the Istanbul bourse. Yet it’s also posing risks to a market Turkish companies have increasingly tapped in recent years. The lira corporate bond market has expanded 14-fold over the past decade, surpassing one trillion liras as of end-September, according to brokerage Ak Yatirim. Mutual holds hold a third of those volumes. “Most funds are likely to remain cautious on corporate bonds for some time,” said Altan Aydin, a fund manager at Perform Portfoy in Istanbul.

“Redemptions across the fund industry have forced managers to sell their more liquid assets first, leaving corporate bonds with a larger weight in portfolios. That’s an exposure asset managers are unlikely to want to increase,” Aydin said. He expects smaller companies to bear the brunt, while well-established names should still retain access to the market. A Garanti BBVA unit issued lira debt this month, while several other large entities including Turkcell AS and Akbank TAS raised money with privately placed bonds. Read: How Turkey’s High-Flying Funds Came Crashing Down: Some market players such as Altug Ozaslan, founder of independent advisory firm Fortuna Capital, expect the issuance dip to be temporary. “A few small- to mid-sized firms could be negatively affected by recent developments, but I don’t think this will reach a scale that would have a meaningful impact on the market or the sector as a whole,” Ozaslan said. Even so, there’s still the risk of a spillover from debt that was issued by entities linked to the crisis-hit firms.

About 35 billion liras of such bonds are outstanding, according to data compiled by Bloomberg. While the amounts are small relative to the overall size of the market, funds holding these securities remain exposed to potential non-payment, with the stress potentially seeping into other parts of their portfolios.

That risk came into sharper focus on Oct. 5 when Tera Yatirim Bankasi failed to make 6.05 billion liras worth of principal and coupon payments. On Thursday, market regulators removed Tera Yatirim Menkul’s application to raise a total 69 billion liras in debt, alongside a capital increase. The regulator “prevailing circumstances and existing uncertainties” for the decision.

“Money market and short-term debt instrument funds were among the key buyers of corporate bonds,” said Alp Serbetli, head of Treasury at ICBC Turkey Investment. Should investors need to sell securities to meet redemptions, they could also run into liquidity snags. Turkish regulators have unwound scores of funds in the past month, and assets with limited liquidity accounted for 58.6% of their portfolios, equivalent to about 334 billion liras, a report by brokerage Gedik Yatirim found. “The issue is not the amount of these corporate bonds, but the ability to sell them,” said Omer Gencal, managing partner at Pixis Capital. “Fund outflows are feeding through to corporate bond prices and issuers’ ability to roll over their debt. With no market-making or buyback mechanism in place, the market has a limited buffer.”