European Bank for Reconstruction and Development (EBRD) has launched a new $185m financing facility for micro, small and medium enterprises (MSMEs) in Turkey.
Under the framework, the EBRD will extend loans to Turkish partner banks for on-lending to private companies, with special focus on more difficult regions, agricultural financing and women entrepreneurs.
According to EBRD, the Turkish MSME financing facility is supported by EUR15m in grants from the European Union in collaboration with the Turkish Treasury and a further $6m in technical assistance, which will be used to assist Turkish banks in developing their MSME loan portfolios.
The first loan extended under the Turkish MSME financing facility is a $44m credit line to VakifBank, a state-controlled bank.
Structured under the bank’s A/B loan scheme, the EBRD is retaining $25.4m on its own account and the International Cooperation and Development Fund is subscribing to $6.3m of the A-loan. The remaining $12.3m B-loan will be syndicated to a group of commercial banks.
Michael Davey, resident country director for Turkey at EBRD, said: “This new EBRD facility for micro, small and medium-sized companies operating in Turkey reinforces the EBRD’s commitment to support the growth of this important sector for the country’s economy, particularly in more remote regions. The funds will also have a positive impact on the Turkish banking sector, providing access to longer term financing.”