EBRD partners with Turkey’s credit guarantee fund to expand financing for women-led firms

By Olga Rosca
@olgarosca


(l-r) Murat Karagöz, Turkey’s Ambassador in Amman, Caner Teberoğlu, KGF’s Deputy General Manager, Raci Kaya, Deputy Undersecretary of the Turkish Treasury, and Arvid Tuerkner, EBRD Managing Director for Turkey

  • Agreement to unlock €300 million in new financing for women entrepreneurs
  • Turkey’s Credit Guarantee Fund to provide risk mitigation
  • Garanti Bank among local lenders seeing demand for credit from women-run firms.

The EBRD and Turkey’s Kredi Garanti Fonu (KGF), a credit guarantee institution, are joining forces to expand financing for small and medium-sized businesses led by women.

The partnership will enable the EBRD to unlock €300 million in new financing to support women’s entrepreneurship in a country where only 34 per cent of women participate in the workforce.

Women running their own businesses find it particularly hard to access affordable financing. They generally tend to borrow from friends and family rather than from a formal financial institution.

Over the past three years, an initiative developed by the EBRD with the European Union and the Turkish government has helped 17,000 women in 79 out of 81 Turkish provinces to grow their businesses through a combination of finance, advisory services and coaching. 

Under the programme, the EBRD provided €300 million to five key Turkish lenders: Garantibank, QNB Finansbank, TEB, Isbank and Vakıfbank. Through their branch networks, loans averaging €15,000 were extended to firms led by women. Two-thirds of this financing has been channelled to companies outside the large metropolitan areas of Istanbul, İzmir and Ankara.

Marking a new phase of the programme, KGF will provide risk mitigation to the EBRD’s partner banks through the absorption of a portion of potential losses on their loans made under the programme.

The agreement was signed by the Fund’s Deputy General Manager Caner Teberoğlu and EBRD Managing Director for Turkey Arvid Tuerkner, on the sidelines of the EBRD’s Annual Meeting and Business Forum at the Dead Sea, Jordan.

Raci Kaya, Deputy Undersecretary of the Turkish Treasury, said: “I am sure that everyone knows the success of the EBRD’s Women in Business Programme, which Turkey also supported as a donor. It is not easy to find a multilateral development bank such as the EBRD, which is directly touching the daily lives of women, youth and small businesses. Having contributed to the past year’s strong economic growth of Turkey, now KGF is taking the initiative to support women entrepreneurs.” 

Caner Teberoğlu added: "Throughout 25 years of my banking experience, I can state that Women entrepreneurs are devoted debtors. We at KGF have always stood by businesswomen and have to date help them access TL 355 million in financing. And we will continue doing so. I am grateful to our stakeholders and the EBRD, and hope the programme will lead towards greater partnerships.”

Arvid Tuerkner commented: “At the EBRD we spare no effort to ensure that our investments create opportunities for those who cannot easily access financing, including women entrepreneurs. We have helped 17,000 women to grow their businesses and this is only a beginning. We are honoured to join forces with the KGF to unlock further financing for women-led firms and are already working with Garanti Bank on new financing. We encourage other development partners and commercial lenders to join this worthwhile effort.”

The EBRD is a major investor in Turkey. Since 2009 it has invested €10 billion in various sectors of the Turkish economy, with almost all investment in the private sector. In 2017 alone, the EBRD invested €1.6 billion in 51 projects in the country. Nearly a third of this financing was provided in Turkish lira.

KGF is a state institution with a mission to help small and medium-sized enterprises access finance. It provides guarantees to companies that do not have access to credit by covering a share of the default risk of the loan. If a company fails to repay a loan, the lender recovers the value of the guarantee.