The EBRD is boosting its support for the development of the Turkish real economy with a newly launched financing facility of up to $185 million for micro, small and medium enterprises (MSMEs).
Under the framework, the EBRD will extend loans to Turkish partner banks for on-lending to private companies, with special focus on more difficult regions, agricultural financing and women entrepreneurs. The Facility will increase the financial intermediation in the Turkish banking sector and will facilitate MSMEs’ access to financing.
The Turkish MSME Financing Facility is supported by €15 million in grants from the European Union in collaboration with the Turkish Treasury and a further $6 million in technical assistance, which will be used to assist Turkish banks in developing their MSME loan portfolios.
The first loan extended under the Turkish MSME Financing Facility is a $44 million credit line to VakifBank, the fifth largest bank in terms of assets, the fourth largest listed bank in Turkey, which is also the second largest state-controlled bank.
Structured under the Bank’s A/B loan scheme, the EBRD is retaining $25.4 million on its own account and the International Cooperation and Development Fund (TaiwanICDF) is subscribing to $6.3 million of the A-loan. The remaining $12.3 million B-loan will be syndicated to a group of commercial banks.
“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”, said Michael Davey, EBRD’s resident Country Director for Turkey.
Since the beginning of its operations in Turkey in 2008, the EBRD has committed €340 million in various sectors of the country’s economy. (press release)