EBRD Boosts Lending To SMEs In Turkey

Published: 05-Nov-2009

To build up the availability of competitive financing products to small businesses

European Bank for Reconstruction and Development (EBRD) increased the financial support to private businesses in Turkey with a E50m syndicated loan facility to Garanti Bank for on-lending to micro, small and medium-sized enterprises (MSMEs) operating outside the main Turkish cities.

The proceeds of the EBRD funds will be used to finance the investments of small companies operating outside the three main Turkish cities Ankara, Istanbul and Izmir. A part of the loan will be used to continue Garanti Bank’s support to female entrepreneurs in rural areas. The loan will increase Garanti Bank’s commitment to this niche market and will provide a variety of tailored financial products.

The syndicated loan facility will support Garanti Bank’s drive to broaden the geographical coverage of its lending activities and build up the availability of competitive financing products to small businesses.

Successfully syndicated under the EBRD A/B structure, Garanti Bank is retaining E20m on its account. The remaining E30m is provided by the Netherlands Development Finance Company (FMO), the International Co-operation and Development Fund (TaiwanICDF) as well as by a group of commercial banks, AKA Ausfuhrkredit, Bank of Taiwan, BRE Bank, Chang Hwa Bank, Land Bank of Taiwan and Raiffeisenlandesbank Niederosterreich-Wien.

Varel Freeman, vice president of EBRD, said: “The small business sector is a crucial part of the Turkish economy and Garanti Bank is well placed to provide the support it needs.”

Tolga Egemen, executive vice president of financial institutions and corporate banking at Garanti Bank, said:“We believe that this transaction is an important facility manifesting future collaborations of the two institutions for the promotion of the Turkish economy.”