The European Bank for Reconstruction and Development (EBRD) and other funders have provided a EUR 50 million, the equivalent of over USD 75.3 million, “syndicated loan facility” to Garanti Bank, a private bank in Turkey, to lend to micro, small, and medium enterprises (MSMEs) [1,2,3]. Loans will be provided for businesses outside of the cities of Ankara, Istanbul and Izmir as well as to continue support for female entrepreneuers in rural areas of Turkey [1]. This will aid in supporting Garanti Bank’s goals of “[broadening] geographical coverage” and increasing “competitive financing products to small businesses” [1]. The EBRD has provided EUR 20 million, the equivalent of over USD 30.1 million, of the funds for this loan facility. The remaining EUR 30 million, the equivalent of over USD 45.1 million, was provided by; the Netherlands Development Finance Company (FMO), a development bank that provdes entrepreneurial capital; the International Co-operation and Development Fund (TaiwanICDF), an organization that provides “technical assistance, investment and lending operations, education and training, and humanitarian assistance;” and the commercial banks AKA Ausfuhrkredit, Bank of Taiwan, BRE Bank, Chang Hwa Bank, Land Bank of Taiwan and Raiffeisenlandesbank Niederosterreich-Wien [1,4,5]. No specific breakdown of the division of this funding is available.
By Christopher Maggio, Research Assistant
About:
Netherlands Development Finance Company (FMO)
Description:
The Netherlands Development Finance Company (FMO) supports financial institutions and countries through “loans, participations, guarantees and other investment promotion activities.” It was founded by the “Dutch government, private sector, employers and employee organizations.” It has access to government funds and therefore can take higher risks with their investments including long-term finance. It also specializes in local currency finance.
Microfinance Information Exchange (MIX) Profile:
http://www.mixmarket.org/funders/fmo
Organization’s Website:
http://www.fmo.nl/smartsite.dws?id=FMO_HOMEPAGE
Just the Facts
-Country of Incorporation: Netherlands
– Year Founded: 1970
– Legal Status: Public-Private Development Bank
-Investment Portfolio: Euro 4.2 billion (as of 29/Nov/09)
– Area of Operation: Asia, Africa, Latin America & the Carribean and Europe & Central Asia
– Participant(s)/Backer(s)/Investor(s): Dutch Government, Other (Unlisted)
– Products: loans, participations, guarantees and other investment promotion activities
-Currency: EUR, Local
– Investment Officer Micro & Small Enterprise Finance: Maurice Scheepens
Contact Information:
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.
(Netherlands Development Finance Company)
Visitors address
Anna van Saksenlaan 71
2593 HW The Hague
The Netherlands
Mail address
P.O. Box 93060
2509 AB The Hague
The Netherlands
Telephone +31 (0)70 314 96 96
Fax +31 (0)70 324 61 87
Mail Info@fmo.nl
Chamber of Commerce Haaglanden:
registry nr: 270 78 545
Additional Resources:
Dutch Government: http://www.government.nl/
Bibliography
[1] EBRD press release entitled ‘EBRD boosts lending to micro and small businesses in Turkey’: http://www.ebrd.com/new/pressrel/2009/091104.htm
[2] EBRD: http://www.ebrd.com/
[3] Garanti Bank: http://www.garantibank.com/
[4] Netherlands Development Finance Company (FMO): http://www.fmo.nl/smartsite.dws?id=FMO_HOMEPAGE
[5] International Co-operation and Development Fund (TaiwanICDF), http://www.icdf.org.tw/english/index.asp
Source Article:
4 November 2009
EBRD boosts lending to micro and small businesses in Turkey
€50 million to Garanti Bank for on-lending to small businesses
The EBRD is boosting the availability of finance to private businesses in Turkey with a €50 million syndicated loan facility to Garanti Bank for on-lending to micro, small and medium-sized enterprises (MSMEs) operating outside the main Turkish cities.
Garanti Bank is a leading lender to MSMEs and the second largest private bank in Turkey by assets, serving more than eight million customers.
While micro and small-sized companies represent a significant part of the Turkish economy, their growth is constrained by limited access to finance. Businesses in rural areas are particularly affected.
The proceeds of the EBRD funds will be used to finance the investments of small companies operating outside the three main Turkish cities Ankara, Istanbul and Izmir. A part of the loan will be used to continue Garanti Bank’s support to female entrepreneurs in rural areas. The loan will increase Garanti Bank’s commitment to this niche market and will provide a variety of tailored financial products.
The project will support Garanti Bank’s drive to broaden the geographical coverage of its lending activities and build up the availability of competitive financing products to small businesses.
Successfully syndicated under the EBRD A/B structure, the Bank is retaining €20 million on its account. The remaining €30 million is provided by the Netherlands Development Finance Company (FMO), the International Co-operation and Development Fund (TaiwanICDF) as well as by a group of commercial banks: AKA Ausfuhrkredit, Bank of Taiwan, BRE Bank, Chang Hwa Bank, Land Bank of Taiwan and Raiffeisenlandesbank Niederosterreich-Wien.
“The small business sector is a crucial part of the Turkish economy and Garanti Bank is well placed to provide the support it needs”, said Varel Freeman, EBRD First Vice-President.
“Garanti is the first bank in Turkey to establish a separate business line for small and medium enterprises (SMEs), disbursing the highest amount of loans to SMEs in the country. We believe that this transaction is an important facility manifesting future collaborations of the two institutions for the promotion of the Turkish economy”, said Tolga Egemen, Executive Vice President for Financial Institutions and Corporate Banking from Garanti Bank.
With assets exceeding $65 billion, and recognised for its customer oriented approach and innovative culture, Garanti Bank operates through a wide distribution network of over 750 branches including five foreign branches and four international representative offices, more than 2650 ATMs, an award winning call centre and a state-of-the-art internet and mobile banking technology.
This is the second EBRD transaction in the Turkish banking sector. In October the EBRD has signed a €20 million credit line to DenizBank for financing small and medium-sized agribusinesses companies in Turkey.
EBRD has a small business portfolio of over $1 billion across its countries of operation.
Press contact:
Ina Coretchi, London – Tel: +44 20 7338 7874; E-mail: coretchi@ebrd.com
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