MICROCAPITAL BRIEF: World Bank Group’s IBRD Lending $400m to Industrial Development Bank of Turkey (TSKB) for SMEs, “Women-inclusive” Enterprises, Businesses Serving Syrian Refugees

The International Bank for Reconstruction and Development (IBRD), a unit of the US-based World Bank, recently approved a 29-year loan of USD 400 million to the Inclusive Access to Finance Project, an initiative sponsored by the Turkish government that is designed to provide “long-term” financing to enterprises owned or managed by women as well as businesses operating in areas with significant inflows of Syrian refugees. The Industrial Development Bank of Turkey, a privately owned institution also known by its Turkish acronym TSKB, will administer the proceeds from the loan. Of the total, 60 percent is to be on-lent to small and medium-sized enterprises (SMEs), 30 percent to “women-inclusive” enterprises of any size, and 30 percent to enterprises serving refugees.

Founded in 1950, TSKB is headquartered in Istanbul and seeks to support “the economic, environmental and social development of Turkey.” Its main segments of business include investment banking, consulting, and providing debt and equity financing to corporations and SMEs in the Turkish renewable energy, wholesale banking, infrastructure, real estate and healthcare sectors. As of March 2018, TSKB reports TRY 9.2 billion (USD 2.3 billion) in total assets and a loan portfolio of TRY 4.2 billion (USD 1.1 billion). For 2017, the company reported return on assets (ROA) of 2.3 percent and return on equity (ROE) of 18.4 percent. Also during 2017, TSKB disbursed loans totaling EUR 150 million (USD 180 million) to 114 SMEs.

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 2018, it has 189 member nations. The group encompasses (1) IBRD and the International Development Association, which make up the World Bank; (2) the International Finance Corporation; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2017, the World Bank Group disbursed funds totaling USD 44 billion.

The World Bank provides grants, debt and equity investments as well as technical support to entities based in middle- and low-income countries. As of June 2017, IBRD and IDA reported total assets of USD 406 billion and USD 197 billion, respectively. As of the same month, they reported outstanding loans of USD 177 billion and USD 138 billion, respectively. During the 12 months ending June 2017, IBRD disbursed USD 18 billion in new loans to 133 projects and IDA loaned USD 13 billion via 257 projects.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

World Bank press release
http://www.worldbank.org/en/news/press-release/2018/05/22/world-bank-financing-increases-access-to-finance-and-promotes-labor-market-participation-for-women-and-vulnerable-groups

TSKB background
http://www.tskb.com.tr/en/about-us

TSKB annual report
http://www.tskb.com.tr/i/content/3118_1_TSKB_FRAE_2017_UYG_uyg_41.pdf

TSKB finances
http://www.tskb.com.tr/i/content/3483_1_tskb-kons-en.pdf

IBRD background
http://pubdocs.worldbank.org/en/848841521832671371/Information-Statement-FY17-Final.pdf

IBRD finances
http://pubdocs.worldbank.org/en/476501524663465554/IBRD-Jun-17.pdf

MicroCapital article; February 5, 2013; International Bank for Reconstruction and Development (IBRD) to Loan $20m for Russian Government’s Microfinance Development Program
https://www.microcapital.org/microcapital-brief-international-bank-for-reconstruction-and-development-ibrd-to-loan-20m-for-russian-governments-microfinance-development-program/

MicroCapital article; April 4, 2018; World Bank’s IDA Commits $30m to Bhutan for Goals Including Boosting Small Business, Access to Finance
https://www.microcapital.org/microcapital-brief-world-banks-ida-commits-30m-bhutan-goals-including-boosting-small-business-access-finance/

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