The European Investment Bank is expanding its support to small and medium enterprises (SMEs) in Turkey by bringing a new partner, GarantiBank, under its global loan umbrella. The EUR 100 million global loan to GarantiBank will be used to finance Turkish small and medium enterprises in the manufacturing and service sectors.
The potential for SME lending in Turkey is large, with small businesses representing more than 90% of the total number of enterprises in the country and more active involvement of commercial banks will improve credit access for small and medium businesses as well as boost competition.
GarantiBank, founded in 1946. is a private sector bank jointly owned by the Doğuş Group and General Electric. Since then it has become a prominent Turkish bank with a nationwide network of 433 branches and offices. GarantiBank has shown one of the highest growth rates in the Turkish banking sector over the past few years and currently ranks 3rd in Turkey by total assets. The small and medium enterprise sector has been one of GarantiBank's core target segments accounting for a sizeable portion of the bank's loan portfolio.
EIB's Vice-President Wolfgang Roth said that this new relationship with GarantiBank would assist the EIB in fulfilling its mandate in Turkey and in strengthening GarantiBank's position in the small and medium business finance market. GarantiBank is keen to continue its leading role in the SME market and expects that the EIB loan will provide a clear signal to other long-term investors committed to this sector.
The EIB has provided since 2000 over EUR 1 billion to support small businesses in Turkey through over 17 local banks and leasing companies. Global loans are credit lines to financial intermediaries - EIB partner banks that on-lend EIB funds under their own management, at their own risk and on their own conditions but pass on the benefits from the EIB's favourable lending conditions. This type of lending is used by the EIB to finance small and medium-sized projects involving a total investment of less than EUR 25 million.
The EIB is committed to supporting the development of Turkey's economy to help to prepare the country for EU membership. To access finance for SMEs and to check specific requirements, contact the local finance institutions directly.