News from 2015-07-09 / KfW Development Bank

KfW issues promotional loan of 200m to the Turkish VakıfBank

Help for small and medium-sized enterprises in Turkey

An abundant supply of freshly harvested fruits at the market, a friendly smile for customers - this is not only good for supply and business, but is a major element of daily life in many regions of Turkey. Many small and micro businesses ensure that economic activity flourishes and that people's livelihoods are secured.

In fact they form the backbone of the Turkish economy. More than 90 % of all companies belong to the group of micro, small and medium-sized enterprises (MSME). Seven out of ten workers earn their living from these companies. However, the preconditions for adequate growth and the development of these companies are very limited. For there is a lack of suitable financing on offer from the banks.

A promotional loan of EUR 200m, which KfW Development Bank has arranged with the Turkish VakıfBank on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) under the German government's guarantee framework, will provide assistance here.

A man is standing in front of a small fruit and vegetable market.
Small businesses are the backbone of the Turkish economy.
A woman standing in a washing room.
Better living conditions as a result of the provision of adequate loans.

The creation of jobs

In granting the loan, KfW is helping to improve access to financing for Turkish MSMEs. Loan terms specifically geared to the needs of these businesses will enable them to invest more in the maintenance, replacement and expansion of their facilities, thus improving their competitiveness. It should also have an impact by creating and maintaining jobs – a welcome prospect given the currently high youth unemployment rate of 20 %. Some of the funds have been earmarked for MSMEs in the least developed regions of Eastern and South Eastern Anatolia, and a further tranche will be issued to micro companies.

VakıfBank, which is active as a universal bank, has significantly extended its MSME portfolio in recent years. Given its national network of around 900 branches, particularly in rural areas, it is a suitable partner to reach developing companies effectively and at a local level.

Contact

KfW Development Bank

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