Istanbul, Turkey, May 20, 2020— IFC, a member of the World Bank Group, is providing a $50 million senior loan to Garanti BBVA to help micro, small, and medium enterprises (MSMEs) weather the effects of the COVID-19 pandemic, which has devastated businesses around the world. The loan is one of the first projects which IFC is funding through its $8 billion fast-track COVID-19 financing facility, which is part of the wider World Bank Group response to the pandemic.
Garanti BBVA, a long-time IFC client, will use the funding to lend to Turkish MSMEs so that they can continue to operate and sustain current employment levels. Turkish firms, especially MSMEs, are finding it difficult to access working capital financing as the pandemic has led to the sharp reduction in foreign demand, disruptions of supply chains to which Turkey contributes, and sharply reduced tourism and travel earnings.
“Thanks to the $50 million loan extended by IFC, we will be able to provide greater support to the SMEs affected by the pandemic ” said Garanti BBVA’s CEO Recep Baştuğ.
“IFC is committed to support MSMEs, which are a vital part of Turkey’s economy. The loan will allow Garanti BBVA, a long-lasting partner of IFC in our region, to help address the urgent liquidity needs of smaller businesses and assist them in fighting the negative impacts of the COVID-19 outbreak,” said Vittorio di Bello, IFC’s Regional Head of Industry for Financial institutions in Europe and Central Asia.
The Garanti BBVA loan is being funded through IFC’s Working Capital Solutions (WCS) program, which represents $2 billion of IFC’s $8 billion in fast-track financing. The WCS program is designed to provide funding to emerging-market banks to extend credit to help businesses shore up their working capital, the pool of funds that firms use to pay their bills and compensate workers.
This investment builds on IFC’s long-standing relationship with Garanti BBVA. Most recently, in 2019, IFC provided the bank with a financing package of up to $132.75 million to support SMEs located in 22 lesser-developed Turkish provinces, which are most impacted by refugees under temporary protection. IFC also invested in two pioneering bond offerings by Garanti BBVA--$75 million in the first private sector gender bond in emerging markets (2018), and $150 million in Turkey’s first green mortgage covered bond (2017).
IFC has supported private sector development in Turkey for over fifty years, with a committed exposure of over $4 billion in the country as of June 2019.
About IFC
IFC - a sister organization of the World Bank and 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 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
About Garanti BBVA
Established in 1946, Garanti BBVA is Turkey’s second largest private bank with consolidated assets of close to TL 456 billion ($69.5 billion) as of March 31, 2020. Garanti BBVA is an integrated financial services group operating in every segment of the banking sector including corporate, commercial, SME, payment systems, retail, private and investment banking together with its subsidiaries in pension and life insurance, leasing, factoring, brokerage and asset management, besides international subsidiaries in the Netherlands and Romania. For more information, visit https://www.garantibbvainvestorrelations.com
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