MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Commits $520m to Small and Medium-Sized Agribusiness Enterprises in Turkey, Invests $31m in Sekerbank Bond Programme

The European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in London, recently announced that it has committed EUR 400 million (USD 520 million) to increase financing to small and medium-sized enterprises (SMEs) in the agribusiness sector in Turkey [1]. The funds will be made available under the “Turkey Agribusiness SME Financing Facility” (TurAFF) that offers Turkish banks a “comprehensive mechanism to address unmatched demand for the financing of agribusiness enterprises.” The implementation of TurAFF is supported by an unspecified amount of technical assistance funds provided by the US government.

EBRD is also investing TRY 60 million (USD 31 million) in an asset-guaranteed bond programme established by Sekerbank, a Turkish private commercial bank that lends to micro-, small and medium-sized enterprises (MSMEs) [2]. The funds will be used by Sekerbank to finance investments undertaken by MSMEs in lesser developed regions of Turkey.

As of December 2011, EBRD has committed approximately EUR 1.3 billion (USD 1.7 billion) in different sectors in Turkey.

By Nisha Koul, Research Associate

About European Bank for Reconstruction and Development (EBRD): The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and more recently in Southern and Eastern Mediterranean region. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In the first half of 2011, EBRD invested in 161 projects with a total value of EUR 3.5 billion (USD 4.8 billion).

About Sekerbank: Sekerbank, founded in Turkey in 1953, has total assets of USD 6 billion and a capital adequacy ratio of 16.08 percent according to its 2009 annual report. It made an initial public offering in 1997, and current shareholders include Sekerbank Pension Fund and Turan Alem Securities JSC, each holding stakes of 33.98 percent. Sekerbank provides banking products and services to micro-, small and medium-sized enterprises (MSMEs) through a network of 256 branches, 10 district offices and a foreign representative office in Cologne, Germany.

Sources and Additional Resources:

[1] EBRD News Stories, “€400 million facility to support agribusiness enterprises in Turkey,” http://www.ebrd.com/english/pages/news/press/2011/111117b.shtml

[2] EBRD News Stories, “EBRD subscribes to first asset-guaranteed bond in Turkey,” http://www.ebrd.com/pages/news/press/2011/111209.shtml

MicroCapital.org story, July 14, 2011, “MICROCAPITAL BRIEF: responsAbility Loans $24m to Microfinance Institutions (MFIs) Inecobank, Agricultural Cooperative Bank of Armenia (ACBA), ACBA Leasing all of Armenia; DemirBank of Azerbaijan; Sekerbank of Turkey,” https://www.microcapital.org/microcapital-brief-responsability-loans-24m-to-microfinance-institutions-mfis-inecobank-agricultural-cooperative-bank-of-armenia-acba-acba-leasing-all-of-armenia-demirbank-of-azerbaijan-seke/

MicroCapital Universe Profile: European Bank for Reconstruction and Development, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: Sekerbank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sekerbank

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