Turkey’s Akbank to get $250 million loan from IFC
ANKARA – Anadolu AgencyThe International Finance Corporation (IFC) has announced that it will extend $250 million in loans to Akbank in order to support small and medium-sized enterprises (SMEs) in Turkey.
“The IFC’s eight-year funding package will support Akbank’s Diversified Payment Rights [DPR] program, an established financing instrument in Turkey’s capital markets to raise long-term financing,” the IFC, a member of the World Bank Group, said in a statement on Aug. 19.
“Extending new loans to SMEs is one of our strategic priorities. We are committed to providing long-term financing to the real sector and the Turkish economy at longer tenors and the most favorable rates,” said Kerim Rota, Akbank executive vice president.
According to the IFC, DPR financing uses foreign currency inflows from export and other sources as collateral, enabling funding at longer periods and cheaper rates than those provided through unsecured loans.
In 2010, the IFC and Akbank cooperated to revive the DPR funding structure in Turkey, helping to diversify and deepen Turkey’s capital markets, it stated.
“With this financing, we are addressing two of IFC’s key development priorities in Turkey: financial inclusion and capital markets development,” said Manuel Reyes-Retana, IFC regional head of financial institutions group in Europe, Middle East, and North Africa.
“Access to long-term financing is a challenge in emerging markets, especially for SMEs, the backbone of Turkey’s economic activity. Innovative funding structures such as this allow for bigger cooperation and more impact,” Retana added.
Turkey is the second-largest country of operations for the IFC globally and hosts its largest office outside of Washington D.C. In the fiscal year 2015, the IFC invested $1.8 billion in Turkey, the statement added.
The IFC had also announced on Aug. 17 that it would provide $55 million in loans for Turkey’s leading flat-rolled aluminum production company, Assan.