IFC Investment to Boost Access to Finance for Green Housing in Türkiye

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Istanbul, Türkiye, August 29, 2022—A new investment by IFC aims to help increase access to housing finance and support the deepening of financial markets in Türkiye.  

IFC is investing $100 million in a diversified payment rights issuance made through the Diversified Payment Rights (DPR) program of Türkiye İş Bankası A.Ş. (İşbank), a long-standing IFC client and the largest private bank in Türkiye in terms of total assets, loans, and deposits. The proceeds from the investment will help İşbank scale up its residential mortgage loan portfolio. Some 35 percent of IFC's financing is earmarked for green mortgages, which support the purchase of homes that conserve energy and water and are built from materials with a lower carbon footprint.

"On the basis of the long-standing and strong cooperation between our institutions, we are pleased to be working with IFC once again, to support residential mortgage finance in Turkey. The proceeds of the transaction will be also disbursed to green mortgages, which will further support Isbank's green products offered to the customers in line with its focus on sustainable finance," said Gamze Yalcin, the Deputy Chief Executive of Isbank.

While demand for housing is rising, Türkiye's housing finance remains small compared to the size of the economy. Mortgages amount to about 4 percent of gross domestic product compared to 50 percent in the European Union. The demand for housing and mortgage finance in Türkiye is driven by rising urbanization, especially among young people, though people from all age brackets often struggle to obtain mortgages.

"It can be challenging for people in Türkiye, to afford their own homes at the moment," said Arnaud Dupoizat, IFC Country Manager for Türkiye. "That's why it's crucial that we expand the country's pool of mortgage financing, including loans that allow people to purchase more environmentally friendly homes."

The financing to İşbank is part of IFC's strategy in Türkiye to build a more resilient financial system and make available more climate financing. Ultimately, the aim of that work is to help improve the quality of life in urban areas and help the country meet its climate goals.

IFC has supported private sector development in Türkiye for more than 50 years and has invested close to $10 billion in the last 10 years alone. Türkiye represents IFC's second-largest country exposure globally with a committed portfolio of close to $4 billion as of June 2022.

About İşbank

Established in 1924, Isbank is the largest private bank in Turkey with consolidated assets of US$83.5 bn and total equity of US$8.2bn. The Bank ranks first among private banks with its 10.7% market share in total assets, 10.7% in total loans and 11.4% in total deposits on a bank-only basis as of June 30, 2022. As of June 30, 2022, the Bank has 1,153 branches, including 1,132 domestic branches, and 22,757 employees and provides services to around 10.8 million digital customers.

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 2021, IFC committed a record $31.5 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 the COVID-19 pandemic. For more information, visit www.ifc.org. 

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