EIB’s lends €150m to Halk & Akbank for Turkish SMEs

Microfinance Focus, July 31, 2010: Supporting Turkey’s small and medium-sized enterprises (SMEs), The European Investment Bank has signed two loans for a total amount of EUR 150 million. The two EIB loans of EUR 75 million each went to Akbank and Halk Bank. They consist of a combination of EIB funds (80%) and European Union grants (20%) for onlending concessional financing to smaller Turkish companies. The financing is put in place in cooperation with the Turkish Treasury.

Both banks are long-standing EIB partners and are amongst the leading banks in Turkey with extensive branch networks and wide SME portfolios in the country. These EIB loans are designed to support SME investment in tangible or intangible fixed assets, as well as working capital. Investment can be for new projects, or the modernisation/expansion of existing businesses, mainly in the manufacturing industry, agribusiness, hotel, tourism, energy, environment, construction, trade, retail, services, health and education.

EIB Vice-President Matthias Kollatz-Ahnen said on the occasion today: “As the European Union’s bank, we are keen to confirm once more our substantial, swift and strong support to Turkey, which remains the largest recipient country of EIB financing outside the EU. Our support for the country’s SMEs has reached EUR 2.5 billion via 14 operations in the last two years. Today, we are reaching a qualitative milestone through an innovative structure for SMEs in cooperation with the EU Commission. This groundbreaking operation drives borrowing costs for SMEs further down through a mixture of the attractive conditions of the EIB loans and EU interest-free funds. Lower costs and longer loan tenors will increase the resilience of the companies and improve the affordability of their investments to cope with the negative consequences of the global crisis.

“The expected economic benefits of our support are significant in terms of job maintenance and private sector development in Turkey as SMEs – with 1.9 million companies – is the largest sector of the Turkish economy and constitutes the largest provider of employment. This operation is fully in line with EIB strategy for 2010, whereby SMEs will once more remain a priority for the EIB, as their access to finance remains difficult while their impact on economic recovery and jobs is high” Mr. Matthias said.

Ambassador H.E. Mr Marc Pierini, Head of the EU Delegation to Turkey, remarked: “Turkey and the EU need to sustain economic growth with more jobs and greater social cohesion. They need to build on the joint economic achievements of the Customs Union, a success story that has tripled bilateral trade to EUR 100 billion. Two thirds of all foreign direct investment to Turkey comes from the EU, which has enabled a remarkable degree of integration of both economies in terms of production, markets and supply chain. Leading EU companies employ hundreds of SMEs as sub-contractors in Turkey. SMEs obviously have problems in gaining access to finance and the recent economic crisis has made the situation more difficult for them.

“The EU has been supporting several initiatives to improve access to finance for small businesses in Turkey by working together with financial institutions such as the EIB. With such initiatives ranging from loan programmes to credit guarantee schemes and venture capital funds, the EU supports Turkish SMEs with a total financing envelope of approximately EUR 1.2 billion in 2010. Such a substantial effort is warranted by the current conditions of the global economy and the need to support growth and preserve jobs. The SME recovery support loan programme that we are launching today is part of this effort and I hope it will contribute to achieving this shared objective” he added.

One of the EIB Group’s top operational priorities is to support the investments of small and medium-sized enterprises (SMEs), the engine of Europe’s economy. Well before the crisis erupted, the EIB undertook a wide-ranging consultation of SME market players enabling it to develop a new lending product, dubbed EIB loans for SMEs. Available since October 2008 and channelled through commercial banks, these new loans are simpler, more flexible and more transparent, making it possible to reach a greater number of European SMEs.

With a total of EUR 20.8bn signed with intermediary banks during 2008 and 2009, the EIB is well on its way to delivering on its target of lending EUR 30bn to SMEs between 2008 and 2011, a target set in the European Economic Recovery Plan that was adopted by the Heads of State and Government in December 2008.

Related Posts:

• EBRD lends $20m for ‘Turkey Sustainable Energy Financial Facility’
• OPIC provides $100M for SME lending in Turkey
• EBRD’s €50 million loan to Garanti Bank to help women, small businesses
• French SMEs get EUR 300m boost from EIB and Société Générale
• EIB €110 million to boost SMEs and Microfinance in Bosnia
• EIB gives EUR 300 million for European SMEs
• EIB signs EUR 150 million finance contract for Italian SMEs Projects
• EBRD to provide €15 million to boost Moldova SMEs

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