Boosting finance options for Turkish businesses, the European Bank for Reconstruction and Development (EBRD) is extending a TL 50 million credit line to TAM Faktoring, Turkey’s largest factoring company in terms of clients.
TAM Faktoring primarily serves micro, small and medium-sized enterprises (MSMEs) and the EBRD’s loan aims to expand the availability of credit for such firms, particularly in regions in need of an economic boost.
Factoring is a transaction in which a business sells its invoices, or receivables, to a third-party financial company known as a “factor.” The factor then collects payment on those invoices from the business's customers.
MSMEs account for 55 per cent of Turkish exports and are an important contributor to the Turkish economy. They are also central to creating jobs for the country’s growing labour force, representing 74 per cent of registered employment.
Despite this critical role in employment and growth, MSMEs continue to be affected by limited access to finance. Small and medium-sized enterprises (SMEs) generate 56 per cent of total corporate revenues in Turkey but only received 38 per cent of Turkish lira denominated bank loan volumes at the end of 2015. Access to finance for micro enterprises is even lower at only 16 per cent.
Jean-Patrick Marquet, Director for EBRD operations in Turkey, said: “Availability of credit is a key factor in the development of small businesses and we are pleased to extend our second credit line to TAM Faktoring to help broaden access to finance for such companies.”
The EBRD is a 9.5 per cent shareholder in the company and has previously provided a TL 30 million loan.
Kunter Kutluay, General Manager of TAM Faktoring, said: “This facility will strengthen our capability to provide fast and efficient access to finance for our current and future customers. It is also a great example of our long-term commitment to the Turkish MSME sector.”
Established in 2012, TAM Faktoring is one of the fastest growing factoring companies in Turkey. It is set to open six new branches in early 2017, in addition to an existing network of 22 offices.
The EBRD is a leading institutional investor in Turkey and currently operates from offices in Istanbul, Ankara and Gaziantep. To date the Bank has invested close to €9 billion in the country through more than 200 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector