IFC - International Finance Corporation

05/08/2024 | Press release | Distributed by Public on 05/08/2024 07:48

IFC Invests in Türk Ekonomi Bankası to Enhance Access to Finance for Climate-Focused, Women-Owned Smaller Businesses in Türkiye

Istanbul, Türkiye, May 8, 2024-A new IFC investment in Türk Ekonomi Bankası A.Ş. (TEB), a private bank primarily serving corporate customers and small enterprises, aims to bolster access to finance for small and medium enterprises (SMEs), with a focus on climate mitigation and adaptation projects, women-owned businesses, and agribusinesses in Türkiye.

IFC is supporting the bank through an innovative Tier-2 instrument, providing up to €100 million in subordinated debt financing compliant with Basel III requirements and Türkiye's Banking Regulation and Supervision Agency's equity regulations. This investment will enable TEB to significantly expand lending to underserved smaller enterprises during a period of macroeconomic volatility.

"This investment will enable our bank to expand lending to small and medium businesses to finance climate-conscious projects, women-owned smaller businesses, and agribusinesses in Türkiye," said TEB CEO Ümit Leblebici. "As a bank that focuses on climate mitigation, as well as empowering women entrepreneurs and business owners to ensure sustainable economic growth, we will continue to support them with both financial facilities and non-financial services. We are strongly committed to expand and diversify our external financing tools and we are also pleased to build on our ongoing strong relationship with IFC and increase our support for sustainable development in Türkiye."

SMEs represent 73.5 percent of jobs in Türkiye, yet they receive only 27 percent of bank loans, negatively impacting business operations and growth. By enhancing financing opportunities for underrepresented smaller business segments, IFC estimates that this project will create more than 300,000 jobs in the country over the next five years.

"Türkiye can only thrive economically if it has a strong and inclusive financial sector," said Wiebke Schloemer, IFC Director for Türkiye and Central Asia. "This investment in TEB, a long-standing client of IFC, is poised to enhance the country's sustainable economic growth, promote greater economic inclusion, and stimulate job creation."

Türkiye is among the top 10 most energy-intensive countries in the Organisation for Economic Co-operation and Development. Achieving sustainable development in the country requires prioritizing the reduction of energy intensity in industry and enhancing the energy efficiency of the economy. This investment, in line with IFC's commitment to expanding green finance in Türkiye, aims to address the lack of financing for small-scale climate finance projects.

IFC has supported private sector development in Türkiye for more than 50 years, with investments of nearly $20 billion in the last decade alone. Türkiye represents IFC's third largest country exposure globally, with a committed portfolio of close to $5.2 billion as of April 2024.

About Türk Ekonomi Bankası (TEB)

Türk Ekonomi Bankası (TEB), a financial institution in the Turkish banking sector, was established in 1927. Since its establishment, TEB, with its expanded network of branches and a diversified range of products and services, has pursued operating in various fields of the financial sector, such as investment, leasing, factoring and portfolio management. In 2005, BNP Paribas, a European and international banking establishment and currently operating in 65 countries, became a partner of TEB. In the wake of this partnership, TEB carried over its expertise in corporate, commercial, and private banking into retail, small business, and SME banking. To its financial statements dated March 31, 2024, TEB is one of the major players of the Turkish financial services market with asset size of TL 454 billion and approximately 9,000 employees. TEB continues to make an increasingly greater effort in order to provide multidimensional support that will nourish Turkey's economic and also social added-value growth.

About IFC

IFC - a member of the World Bank Group - is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org

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