IFC Invests $530 Million to Support Smaller Businesses, Bolster Recovery in Türkiye’s Earthquake-Hit Region

Image: Conatiner city in Nurdağı, Gaziantep

• Part of coordinated WBG effort to overcome extensive impact of earthquakes in Türkiye
• Five partner banks will receive the funds to extend loans to support recovery in the eleven provinces hit by the quakes
• Funds will be channeled to thousands of micro and smaller businesses in the impacted region 

Istanbul, Türkiye, December 15, 2023—To support thousands of micro and smaller businesses in Turkish provinces devastated by February's earthquakes and boost recovery efforts, IFC has announced a financing package of up to $530 million, to be channeled through five of the country's leading private banks. The funds include up to $220 million mobilized from international financial and development institutions. 

The funding, which builds on IFC's extensive experience in responding to global natural disasters, aims to support the participating banks by providing liquidity to help them continue lending in the quake-affected provinces. The five banks include Akbank, which will receive $71 million; DenizBank - $119.5 million; QNB Finansbank - $109.5 million; Türkiye İş Bankası - $150 million; and Yapı Kredi - $80 million. 

The mobilized funds include €50 million from the European Fund for Southeast Europe S.A., (EFSE) ; €20 million from Green For Growth Fund, Southeast Europe S.A. (GGF); €105 million from Société de Promotion et de Participation pour la Coopération Economique, SA (Proparco); $20 million from BlueOrchard Mircofinance FundBlueOrchard); and, $7 million from Micro, Small & Medium Enterprises Bonds S.A. (Symbiotics).

The February 2023 earthquakes in southern Türkiye killed more than 50,000 people, displaced more than 3.3 million, and damaged or destroyed over 800,000 buildings. It was the largest such disaster to hit the country in over 80 years. The impacted region is home to more than 470,000 private enterprises, of which 99 percent are micro, small, and medium enterprises (MSMEs). Enabling local banks to continue lending to these businesses is crucial to ensure they can fund repairs and access working capital to help them rebound.

"IFC's investment encourages banks to extend a lifeline to the many smaller businesses affected by the earthquakes," said IFC's Wiebke Schloemer, IFC Director for Türkiye and Central Asia. "The financing package aims to keep these vulnerable but otherwise viable enterprises afloat, as part of our strong commitment to support the economic recovery and foster sustainable and inclusive growth in Türkiye."

Protecting companies from the adverse economic impact of the earthquakes is also expected to have positive spillover effects on the wider economy, increasing the resilience of supply chains and preserving jobs, while staving off even wider regional economic disparities.

The project is part of a coordinated World Bank Group effort to overcome the extensive impact of the earthquakes in the region and wider economy. IFC aims to deploy approximately $1 billion over the next two years to support relief and reconstruction efforts, channeling funding through its longstanding private partners in the financial, manufacturing, and infrastructure sectors.

IFC has supported private sector development in Türkiye for more than 50 years, with investments of nearly $11 billion in the last decade alone. Türkiye represents IFC's third-largest country exposure globally, with a committed portfolio of close to $4.9 billion as of November 2023.

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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