EBRD supports factoring services in Turkey

By Olga Rosca

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Loan to Ulusal Factoring will benefit small and micro enterprises
The European Bank for Reconstruction and Development (EBRD) is extending a local currency loan for the equivalent of €10 million (28 million Turkish lira) to Ulusal Factoring A.S., the 5th largest non-bank owned factoring company in Turkey with over 15 years of operating experience in the factoring sector.
The loan will allow Ulusal to deliver factoring finance to local micro and small companies, an underserved segment in Turkey. Factoring finance is an important source of working capital for those companies and has the potential to reach a wider group of enterprises that would not qualify for traditional bank finance.
Micro and small enterprises generate 35.7 per cent of GDP in Turkey, but have limited access to traditional bank finance. Less than 1 per cent of the 1.4 million small and micro enterprises in Turkey with a turnover of less than €10 million are using factoring finance, which presents a significant market opportunity to further reach micro and small businesses.
Noel Edison, EBRD Director for Insurance & Financial Services, said: “Factoring is an important alternative to traditional bank funding, especially for underserved small and micro companies where a lack of collateral often can represent a serious obstacle to growth. Overcoming this bottleneck can significantly boost growth and the EBRD is pleased to support these efforts.”
Izak Koenka, Founder & CEO of Ulusal Factoring, said: “Funding from EBRD will provide support in our increasing focus on the MSME segment. We are delighted that this will be an important step in building a long-term strategic relationship with EBRD.”
The loan is provided under the Local Enterprise Facility, an investment instrument providing long-term financing to small and medium-sized enterprises whose needs are not sufficiently addressed by existing financing facilities.
The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date, the EBRD has invested over €5 billion in Turkey, in more than 140 infrastructure, energy, agribusiness, industry and finance projects.
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