The International Cooperation and Development Fund (TaiwanICDF) today confirmed that a US$6.3 million pledge will part fund a US$44 million credit line to Turkey’s VakifBank, which is being extended under the overall management of the European Bank for Reconstruction and Development (EBRD). The TaiwanICDF’s share of the financing will be drawn from the existing FIISF—Small Business Account II, which the organization jointly established with the EBRD back in 2008.

Credit to VakifBank is being structured in accordance with the EBRD’s A/B loan scheme. The US$31.7 million A-loan comprises a US$25.4 million commitment by the EBRD and the US$6.3 million from the TaiwanICDF; the US$12.3 million B-loan will be syndicated to a group of commercial banks, including Taiwanese banks.

The loan to VakifBank represents the first commitment being made through the EBRD’s newly established Turkish MSME Financing Facility — a new financing operation ultimately intended to provide up to US$185 million for micro-, small- and medium-sized enterprises (MSMEs) within Turkey, as part of the EBRD’s bid to boost the development of the country’s real economy. The initiative is also supported by €15 million in grants arising from cooperation between the European Union (EU) and the Turkish Treasury, while a further US$6 million in technical assistance has been earmarked to assist Turkish banks to develop their MSME loan portfolios.

Under the framework, the EBRD will extend loans to Turkish partner banks for on-lending to private companies, with a special focus on economically underdeveloped regions, agricultural financing and female entrepreneurs. The facility is expected to have a positive impact on the Turkish banking sector and to facilitate long-term access to financing for MSMEs.

Established in 1991 and headquartered in London, UK, the EBRD is the region’s foremost development agency. The Bank works throughout central and eastern Europe, central Asia and in the CIS to assist countries in transition to move from planned to market-oriented economies, and towards democratic, plural social structures. The 63 members of EBRD include the EU and the European Investment Bank. Thirty of these members are recipients of financing from the EBRD.

Established in 1954, VakifBank is a full service bank headquartered in Ankara, providing retail, commercial and investment banking services via a country-wide network covering 81 cities throughout Turkey. It is the country’s fifth largest bank in terms of assets, the fourth largest listed bank, and the second largest state-controlled bank.

• Update: 2018/03/02
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