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.
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,
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,