EIB lending EUR 150 million to support investment by Turkish firms
The European Investment Bank (EIB), the European Union’s financing institution, is lending EUR 150 million for development of leasing and lending facilities to support investment by Small and Medium Sized Enterprises (SMEs) in Turkey.
The funds, in the form of a global loan with the Trkiye Sinai Kalkinma Bankasi A.Ş. (TSKB), will be channelled through TSKB, acting as agent, to selected banks who will pass on the funds to finance projects by SMEs in industry, tourism and services in the form of loans or leases. This will be the EIB’s first leasing facility arranged for SMEs in Turkey, and reinforces EIB support for SMEs in the country.
Similar recent EIB global loans have already been fully allocated to SMEs within a few months of contract signature, with good sector diversification, in particular in the foreign currency earning/export sectors of textiles and tourism. The average loan to Turkish SMEs amounted to some EUR 4 million for an average project size of EUR 9-10 million. These recent EIB global loans are expected to create about 3400 new jobs in Turkey, half of which in the tourism sector. About two-thirds of these jobs will be created in less-developed regions.
In addition, the present operation will further diversify EIB support to the Turkish financial sector by including a number of private sector commercial banks and specialized leasing companies as intermediaries. Leasing, which is developing in Turkey, is seen as an ideal form of longer-term financing for smaller SMEs.
The global loan will respond to the needs of the private sector by enabling domestic private banks to provide long-term lending facilities for investment projects. This underlines the continuing commitment of the EIB to supporting Turkish investment projects via reliable local banking partners.