EBRD provides US$ 125 million to VakifBank to support Turkish SMEs

By Olga Rosca
@olgarosca


First Turkish lender to join Finance and Advice for Women in Business programme.
 
The European Bank for Reconstruction and Development (EBRD) is extending US$ 125 million in new financing to Turkiye Vakiflar Bankasi T.A.O. (VakifBank), to support small and medium-sized enterprises (SMEs) in the regions of Turkey where finance for SMEs remains scarce.
 
The financing is extended through an investment in A-rated loan notes under VakifBank’s Diversified Payment Rights (DPR) programme, an established market instrument used by Turkish banks to raise longer-term funding in the capital markets.
 
Announcing the transaction, EBRD Director for Insurance and Financial Services, Noel Edison, said: “We are pleased to provide VakifBank with medium-term funding to help the bank manage the maturity mismatch that remains a challenge for the Turkish banking sector and limits SME financing.”
 
US$ 30 million of the EBRD investment will be on-lent to women-led businesses as part of the new “Finance and Advice for Women in Business” programme funded by the EBRD, European Union and the Republic of Turkey.
 
VakifBank is the first Turkish lender to join this comprehensive package of financial and technical support for women entrepreneurs in Turkey which aims to facilitate access to finance and improve competitiveness. The framework includes dedicated credit lines to commercial banks for on-lending to companies run by women. It also includes a risk-sharing mechanism and advice to help these banks better address the financial needs and growth plans of their clients.
 
The rest of the EBRD funds will support agricultural SMEs across Turkey, especially in the regions where finance for SMEs remains scarce. VakifBank is committed to expanding agricultural lending through its extensive regional network.
 
VakifBank’s Executive Vice President, Muhammet Lutfu Celebi, said: “VakifBank is pleased to be part of this project. We believe that its successful implementation will confirm our strong position in the SME sector, thanks to our diversified customer base and experienced sales teams.”
 
VakifBank, partially listed on Borsa Istanbul, is a full-service commercial and retail bank in Turkey with a wide regional network. It is the seventh-largest bank in the country.
 
The EBRD has a strong track record of providing finance to Turkish banks for on-lending to SMEs. To date, the Bank has provided funds worth €1.6 billion to local lenders in Turkey.
 
The EBRD started investing in the country in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date, the EBRD has invested almost €4.5 billion in Turkey, in more than 130 infrastructure, energy, agribusiness, industry and finance projects. In just five years the EBRD’s portfolio in Turkey has become one of the largest among the countries where the Bank invests.