OPIC Provides $100 Million for SME Lending in Turkey
December 18, 2009
WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC) is providing $100 million in financing to expand bank lending to small and medium-sized enterprises (SMEs) in Turkey and help women entrepreneurs in particular gain access to medium-to-long term credit that has been lacking for SMEs in the country.
Garanti Bank of Turkey will use the OPIC facility to provide medium-to-long term loans to SME clients and expand its SME portfolio. Loans are expected to be made to businesses involved in a variety of sectors, including manufacturing, tourism, services, and construction. General Electric Company, which owns part of Garanti Bank through its subsidiary GE Capital, is the U.S. sponsor of the project.
A portion of the OPIC financing will be dedicated specifically to Garanti’s women entrepreneurship program, created recently in collaboration with the Women Entrepreneurship Association of Turkey to support women SME-owners through tailored products and services, as well as training to assist in the growth of their businesses.
Acting OPIC President Dr. Lawrence Spinelli noted that, despite recent improvements in lending to SMEs in Turkey, the country’s small business sector remained largely underserved by the banking industry. While SMEs account for more than 99% of total enterprises in Turkey and 78% of total employment, they contribute only 7% of domestic investments and obtain only 5%-14% of bank loans.
"Limited access to credit is one reason the SME sector has not served as the engine of the Turkish economy that it should be," Dr. Spinelli said. "This project will enable Garanti Bank to expand its SME lending significantly, which in turn should bolster the Turkish economy. OPIC is pleased to support a project with such important developmental potential."