MICROCAPITAL BRIEF: IFC Lends $12m to Garanti BBVA Leasing Romania for Microenterprises, SMEs, Including Women-owned Enterprises

The International Finance Corporation (IFC), a member of the World Bank Group, recently loaned EUR 10 million (USD 12 million) to Garanti BBVA Leasing Romania, which is controlled by Spain’s Banco Bilbao Vizcaya Argentaria (BBVA). The investment is intended to support microenterprises as well as small and medium-sized enterprises (SMEs) in their efforts to continue their operations and preserve jobs while adjusting to the impacts of the COVID-19 pandemic. EUR 4 million (USD 4.7 million) of the total is earmarked for women-owned enterprises.

Okan Yurtsever, the General Manager of Garanti BBVA Leasing, said, “We have a long-standing partnership with IFC and became in 2017 the first leasing company in Romania that financed women-owned or -managed SMEs. Now, we intend to continue our strategy in 2021 toward this direction, and we are also very proud to have an aligned mission of supporting the post-pandemic return to normalcy.”

This IFC loan is backed by the Women Entrepreneurs Opportunity Facility (WEOF), a joint initiative of the IFC and Goldman Sachs 10,000 Women (GS10KW) program, which promotes access to financial services for women-owned SMEs in developing countries.

Garanti BBVA Leasing Romania is a unit of the Garanti BBVA Romania Group, and it offers vehicle fleet management services as well as leasing for commercial equipment, vehicles and real estate. Garanti BBVA Romania Group is, in turn, owned by Garanti BBVA Turkey. Garanti BBVA Turkey delivers financial services to 15.8 million customers via 922 branches in Turkey as well as at service locations in China, Cyprus, Germany, Malta and the UK. The bank works in microfinance, SME finance, investment banking, insurance, asset management, and corporate and commercial finance. As of 2018, Garanti BBVA Turkey reported year-end consolidated assets of TRY 345 billion (USD 84.3 billion), annual return on average assets of 1.5 percent and annual return on average equity of 12.4 percent. The bank is majority-held by BBVA. As of 2019, BBVA had EUR 699 billion (USD 756 billion) in total assets and 80 million customers in 30 countries.

Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. During the 12 months ending June 2020, IFC reported total disbursements of USD 26 billion, closing the year with total assets of USD 96 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2020, it has 189 member nations. The group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the year ending June 2019, the World Bank Group disbursed a total of USD 62.3 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses.
By Divya Deshmukh, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26545

Garanti BBVA Leasing Romania homepage
https://www.garantibbvaleasing.ro/

Garanti BBVA Romania financial statement
https://www.garantibbva.ro/_assets/ro/pdf/Pilonul%203%20la%2031.12.2020.pdf

Garanti BBVA Turkey profile
https://www.garantibbva.com.tr/en/our_company/about_garanti/garantibank.page

WOEF webpage
https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/bf/focus-areas/bf-sme/bf-weof

Goldman Sachs 10,000 Women
https://www.goldmansachs.com/citizenship/10000women/#overview

Previous MicroCapital article on IFC
https://www.microcapital.org/microcapital-brief-cgap-gogla-ifcs-lighting-global-launch-paygo-perform-standards-seeking-to-boost-investment-in-off-grid-solar/

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