The EIB is providing a EUR 100 million loan to Garanti Leasing, a subsidiary of Garanti Bank, to support the expansion and further development of small and medium-sized enterprises (SMEs) in Turkey.
The proceeds of the loan will be on-lent to SMEs, which continue to drive export activity and economic growth in Turkey, and for whom leasing is often the only means of medium to long-term financing. The 8-year loan will alleviate the medium-term funding constraints on Garanti Leasing and its customers, enabling it to offer leases with longer tenors, a major market requirement. This loan has the special feature of also specifically catering for micro-lending, as a large proportion of Garanti Leasing’s contracts serve this market.
The leasing sector has been one of the fastest growing segments of the Turkish finance industry over the last few years, with Garanti Leasing representing the leading provider of services. Its expertise covers a wide range of businesses from construction through manufacturing and transportation to service industries.
Garanti Leasing is owned by Garanti Bank and headquartered in Istanbul, operating throughout the country with 11 dedicated regional offices and using Garanti Bank’s 319 branches. It has been active in the market since 1990 and increased its volume of new business across the country in 2006 to nearly 19% of the total leasing business volume.
EIB Vice-President Matthias Kollatz-Ahnen, who oversees the EIB’s activities in Turkey, described the project as a timely initiative that particularly adds value for medium-sized Turkish companies in the context of fast growing demand for lease financing.
The EIB has so far extended EUR 2.3 billion worth of funding to small and medium-scale Turkish investment projects through eight intermediary banks and three leasing companies, helping entrepreneurs to start up or expand their businesses. Its cumulative financing in Turkey stands at EUR 8.4 billion and relates to investments in all key economic sectors.