US$ 100 million in new EBRD financing to Turkey’s Finansbank

By Olga Rosca
@olgarosca


 Credit line to support SMEs in central and eastern Anatolia

The European Bank for Reconstruction and Development (EBRD) is extending US$ 100 million in new financing to Turkey’s Finansbank to support small and medium-sized enterprises (SMEs) in the agricultural regions of Turkey.

The funds are being extended via an investment in BBB+-rated loan notes under Finansbank’s Diversified Payment Rights (DPR) programme, an established market instrument used by Turkish banks to raise longer-term funding in capital markets.

Announcing the transaction, EBRD Director for Insurance and Financial Services Noel Edison said: “We are pleased to deepen our cooperation with Finansbank by providing this new medium-term funding to help the bank manage the maturity mismatch that remains a challenge for the Turkish banking sector and limits SME financing.”

With its financing, the EBRD will support SMEs in central and eastern Anatolia. Up to 40 per cent of the funds will be channelled to agricultural lending as agribusiness remains one of the most important sectors of the Turkish economy, contributing 7.4 per cent to the country’s GDP and comprising well over 20 per cent of its active labour force.

Finansbank, one of the largest privately owned Turkish commercial banks, is committed to expanding agricultural lending to meet the needs of its clients, especially in regions where financing remains scarce.

Metin Karabiber, Assistant General Manager for SME and Agricultural Banking said:  “This facility is our first transaction with EBRD for financing SMEs and is very important for our country's economic and development objectives. We will continue to support them with a wide array of solutions that best suit their needs. The transaction further enhances our ability to financially support Turkey's fast growing and very promising micro and small enterprises.”

The EBRD started investing in Turkey in 2009. It currently operates from offices in Istanbul, Ankara and Gaziantep. In 2014 Turkey became the leading recipient country of the EBRD, with new investments worth €1.4 billion.

To date, the Bank has invested over €6 billion in Turkey through close to 160 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised over €12 billion for these ventures from other sources of financing.