The European Investment Bank (EIB) is lending EUR 300 million in the form of a dedicated group facility to four state-supported intermediary financial institutions to improve the access of small and medium-sized companies in Turkey to long-term finance.
The EIB funds will support small and medium-scale projects usually promoted by SMEs in the fields of manufacturing and services, including tourism. The loan will serve to further develop the SME sector in line with the strong growth of the Turkish economy and help to meet the growing demand from the private sector for the financing of productive investments.
To these ends the EIB has joined forces with Türkiye Sinai Kalkınma Bankası (“TSKB”), Türkiye Vakıflar Bankası (“Vakıfbank”), Türkiye Kalkınma Bankası (“TKB”) and Türkiye Halk Bankası (“Halkbank”). These banks are the most active Turkish partners for EIB intermediated loans and all have a successful track record in channelling EIB financing to SMEs in Turkey. They have a profound knowledge of the Turkish market and a well developed network of branches in the country with small and medium-sized entrepreneurs as their customers.
EIB loans to partner banks have been developed as a successful tool for providing long-term funding for co-financing smaller projects with total costs from EUR 40 000 to EUR 25 million up to 50% of their total costs. They constitute credit lines to financial intermediaries that on-lend EIB funds under their own management, at their own risk and on their own terms.
The EIB, the EU’s long-term financing institution, has committed credit lines worth some EUR 2 billion to eight intermediary banks contributing significantly to the development of the domestic banking sector in Turkey, as well as creating additional employment and earning much-needed foreign currency for the local economy.