A US$185mn facility for Turkish micro, small and medium-sized enterprises (MSMEs) has been launched by the European Bank for Reconstruction and Development (EBRD).
The financing facility is available to Turkish partner banks for on-lending to MSMEs, with a focus on agricultural financing, female entrepreneurs and increasing funds for regions that are harder to access.
The first loan of the facility has gone to state-controlled VakifBank, the fifth largest bank in the country in terms of assets, which has received a US$44mn line of credit.
VakifBank’s loan comes in two tranches; a US$31.7mn A tranche, of which the EBRD is providing US$25.4mn and the remaining US$6.3mn is made up from the International Cooperation and Development Fund.
The B tranche will come to US$12.3mn and be syndicated to a group of commercial banks.
The EBRD has also provided Isbank, Turkey’s largest privately-owned bank, with a €20mn (US$24.7mn) credit line, which will be used to offer medium and long-term loans to MSMEs outside Istanbul, Ankara and Izmir.
Furthermore, the EU has provided €15mn (US$18.5mn) in grants and a further €6mn (US$7.4mn) in technical assistance, which will be used to assist Turkish banks in developing their MSME loan portfolios.
Michael Davey, resident country director for Turkey at the EBRD, notes: “This new EBRD facility for micro, small and medium-sized companies operating in Turkey reinforces the EBRD’s commitment to support the growth of this important sector for the country’s economy, particularly in more remote regions.”
“The funds will also have a positive impact on the Turkish banking sector, providing access to longer term financing,” he adds.
Since beginning its operations in Turkey in 2008, the EBRD has committed €340mn (US$419.6mn) to the country’s economy.
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