OPIC Board Approves $400 Million for SME Lending in Turkey, With Focus on Women Entrepreneurs

(OPIC) WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved $400 million in financing to support lending by one of Turkey’s leading banks to small and medium-sized enterprises (SMEs), a critical engine of economic growth in the country but one that has lacked access to long-term credit.

The project will support women entrepreneurs in particular, following on a successful $100 million OPIC loan in 2009 for SME lending to Türkiye Garanti Bankasi A.S,. that has supported over 9300 loans to SME borrowers in Turkey, approximately three-quarters of which were to women.

Garanti is Turkey’s second-largest privately-owned commercial bank and a specialized SME lender. It will use the OPIC facility, provided in collaboration with U.S. insurer MBIA Insurance Corporation, to make loans to SMEs in a wide variety of sectors, including manufacturing, tourism, services and construction. The new project will focus on Garanti’s Women Entrepreneurship program, designed to expand credit to women-owned businesses.

SMEs in Turkey account for approximately 99 percent of all enterprises and 78 percent of employment in the country, but receive only one-third of all loans. Limited access to finance is one of the largest obstacles to growth for SMEs, and the recent global financial crisis has only exacerbated this situation.

“Turkey is a powerful emerging market and important regional leader, and OPIC is committed to helping unlock the full potential of its small and medium-sized businesses, especially those owned by women. By providing SMEs with much-needed longer-term loans, this project will help them boost investment, incomes and employment generation in both urban and rural areas,” said OPIC President and CEO Elizabeth Littlefield.

Garanti provides a full range of financial services to over 10 million customers through 917 domestic branches. Known in Turkey as the Bank of SMEs, Garanti has a leading position in SME lending, with the highest ratio among Turkish banks of SME cash loans to total cash loans. Garanti identified SMEs as a client group in 1997 and since then has built that business from 50,000 customers and $70 million of loans to nearly 1.4 million customers and approximately $11.7 billion of loans in 2011.

“Garanti is the first bank in Turkey to establish a separate business line for small and medium-sized enterprises. Furthermore, as part of its commitment to increasing the contribution of Turkish women entrepreneurs to the wider economy, Garanti has developed the Woman Entrepreneurs' Support Package, the first of its kind designed by a private bank in Turkey. We are pleased to be able to build on our experience in the capital markets, the long lasting relationships established with the international financial institutions and the willingness to cooperate in new areas of business,” said Ali Fuat Erbil, Executive Vice President for Financial Institutions and Corporate Banking from Garanti Bank.