The EBRD is increasing the availability of financing to small and medium-sized enterprises (SMEs) in Turkey’s agribusiness sector with a new €400 million framework. The funds will be channelled through local partner banks to Turkish SMEs operating predominantly in rural areas, under the Turkey Agribusiness SME Financing Facility (TurAFF).
The small business sector represents a key driver of the Turkish economy, providing around 80 per cent of the country’s employment, while agriculture accounts for around 10 per cent of the GDP. Although corporate and consumer lending is picking up in Turkey, the access to financing remains limited for small companies in the agribusiness sector.
The EBRD’s TurAFF will offer a comprehensive mechanism that will help Turkish banks to address the unmatched demand for the financing of agribusiness enterprises. The framework comprises credit lines worth up to a total of €200 million, and a €200 million risk-sharing facility that will be used to co-finance eligible SME investments alongside local partner banks.
The first financing agreement under TurAFF, a €50 million credit line, was signed today in Istanbul with TSKB, Turkey’s first privately owned investment and development bank. TSKB will use the EBRD funds to support the development of local SMEs operating in the agribusiness sector with loans of up to €20 million. In the near future TSKB will also sign a €50 million risk-sharing facility with the EBRD.
“Through this project the EBRD reinforces its commitment to support the development of the real economy sector in Turkey, particularly in the country’s remote regions. This new financing framework will also assist Turkish banks in focusing on this priority sector and diversifying and lengthening their funding base, and we are pleased to launch it in partnership with TSKB,” said Francis Malige, EBRD Director for Financial Institutions, Western Balkans, Eastern Europe and Turkey.
“TSKB, which has been supporting the development of the real economy since its foundation in 1950 will use this facility to finance SMEs in the agribusiness sector. We are, with this facility, happy to commence our partnership with the EBRD in Turkey,” said Orhan Beşkök, TSKB Senior Executive Vice President.
The implementation of TurAFF is supported by technical assistance funds provided by the US government.
Since the beginning of its operations in Turkey, the EBRD has committed over €1.3 billion in various sectors of the country’s economy, which attracted additional investment in excess of €2.7 billion.
