New World Bank Loan to Support Turkey's Small and Medium Enterprises

Stocks and Financial Services Press Releases Thursday June 27, 2013 08:58
WASHINGTON--27 Jun--World Bank

WASHINGTON, June 26, 2013--The World Bank's Board of Executive Directors today approved a US$300 million loan for the Third Access to Finance for Small and Medium Enterprises (SMEs) project for Turkey. The project's main development objective is to broaden and deepen the access of Turkish small and medium enterprises to medium- and long-term finance, specifically through lease financing.

The Third Access to Finance for Small and Medium Enterprises project will be implemented by Ziraat Bank as borrower, with a government guarantee, and will provide medium- and long-term finance to small and medium enterprises in Turkey. Ziraat Bank will act as a wholesaler, and the loan will be intermediated through leasing companies and banks that target SMEs employing fewer than 250 people and having an annual turnover of less than TL 40 million. Total funding under the project will be US$400 million, including US$100 million in co-financing from participating financial institutions.

"SMEs are the engine of growth and employment creation in the Turkish economy, but they continue to face constraints in access to finance," said Martin Raiser, World Bank Country Director for Turkey on the occasion of the loan approval. "Leasing is particularly attractive for SMEs, and with a new regulatory framework approved late last year, the leasing market is poised to grow fast. We are pleased to have this opportunity to catalyze the development of new financing instruments for Turkey's SMEs."

The World Bank credit line will complement existing credit facilities provided by the World Bank, and seeks to build on the success of the former Access to Finance for SMEs Project (SME I) and current Second Access to Finance for SMEs Project (SME II). SME I, a financial intermediation loan, was successfully implemented in 2007-2009 by Halkbank and T

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