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The EBRD is supporting the continued flow of credit to small and medium-sized enterprises (SMEs) and local capital market development in Turkey with an investment of €50 million equivalent in Turkish lira in notes issued under Yapi Kredi’s newly established asset-guaranteed bond programme.
Yapi Kredi, the fourth-largest privately owned bank by asset size in Turkey, is a growing Turkish bank with a large regional outreach of 918 branches in more than 70 cities.
Yapi Kredi Bank’s new bond programme, secured by SME loans, can issue up to €300 million Turkish lira equivalent of notes under tranches with expected maturities of up to five years. The programme is implemented according to the local Communique on Asset Guaranteed Securities, which came into effect before the global financial crisis. By setting a successful example, the project will encourage other banks to broaden their sources of longer-term local currency funding and attract a mix of private and public investors.
The Yapi Kredi asset-guaranteed bond programme is rated A3 (local currency) by Moody’s and is arranged by UniCredit Bank AG, London. The EBRD is investing in the first issuance of notes within this programme, along with the European Investment Bank and Unicredit Bank Austria AG.
With its investment the EBRD is supporting SMEs operating in the agribusiness sector in the priority regions of Turkey and SMEs managed or owned by women under the Women in Business initiative. Part of the EBRD’s investment, €30 million, will be specifically used to fund Yapi Kredi Bank’s lending to small and medium-sized agribusiness companies.
SMEs are a key driver of the Turkish economy, accounting for around 80 per cent of the country’s employment. A significant percentage of SMEs operate in the agribusiness sector, which employs a quarter of Turkey’s workforce. The EBRD’s support to SMEs will help create jobs, reduce regional disparities and promote regional growth and competitiveness both in domestic and international markets.
The second part of the EBRD investment, of €20 million, is part of the EBRD’s Women in Business initiative and will enable Yapi Kredi Bank to finance SMEs managed and owned by women. Currently only 10 per cent of SMEs in the Yapi Kredi Bank loan portfolio are women-run – compared with 40 per cent of businesses in the country which are owned by women.
“Turkey can do much more to enable women to act as economic agents of transition,” said Mike Davey, EBRD Country Director for Turkey. “Women represent a huge resource that can help achieve Turkey’s full economic potential. The EBRD’s investment encourages female entrepreneurs and supports Yapi Kredi Bank in creating an environment in which women who do run businesses can more easily grow their firms.”
The EBRD financing is supported by focused technical assistance measures, funded by the United States Agency for International Development (USAID) and the European Union, to increase Yapi Kredi Bank’s institutional capacity to lend at stable levels to agribusiness SMEs, as well as to attract and support women-led businesses.