EBRD’s first leasing project in Turkey with Yapi Kredi Leasing will support MSMEs

By Svitlana  Pyrkalo
@pyrkalo

Lease financing will become more widely available to Turkish micro, small and medium-sized enterprises (MSMEs) for their growth and expansion. The EBRD is providing a €50 million credit line to Yapi Kredi Leasing (“YKL”) – the largest leasing company in Turkey, owned by Yapi Kredi Bank – to expand leasing services in Turkey’s least developed regions.

The project is the EBRD’s first engagement with the leasing sector in Turkey, and will increase the availability of leasing finance to MSMEs in regions which have been historically under-served by traditional bank and non-bank finance. The project will build on the Bank’s existing relationship with Yapi Kredi Bank to promote MSME finance, energy efficiency, agribusiness and women-led entrepreneurship.

Micro, small and medium-sized enterprises are integral to the Turkish economy, providing almost 80 per cent of employment and 60 per cent of the country’s exports, but many MSMEs are excluded from traditional bank finance due to high collateral requirements and their lack of credit history. The EBRD sees strong potential in Turkey to further develop alternative and more flexible sources of financing for MSMEs, such as leasing. For this facility, EBRD financing will help YKL expand machinery and equipment leasing services to MSMEs operating outside of major cities, where leasing companies are not currently very active.

Mike Davey the EBRD’s director for Turkey said: “Increasing the penetration of financial products, such as leasing, to MSMEs located in remote regions is part of the Bank’s strategy, which aims to promote growth and regional financial inclusion in Turkey. YKL is a strong partner in this regard, with specialised expertise in equipment leasing, an extensive distribution network and a demonstrated commitment to regional expansion.”

Yapi Kredi Leasing said: “Growing our customer base in these areas is important for us, and it is essential for our present and future clients for whom equipment leasing is often the only, or preferable, source of medium- to long-term financing. The EBRD’s loan will allow us to provide support where it is needed most.”

To date, the EBRD has invested more than €3 billion in around 100 projects in various sectors of the Turkish economy. Last year Turkey became the EBRD’s second-largest country of operations by business volume, with €1 billion in new investments in 2012 alone.