European Bank for Reconstruction and Development loan to help Turkish lender support trade, SMEs amid virus crisis
The European Bank for Reconstruction and Development (EBRD) is providing a €100 million ($108 million) loan to a Turkish lender to support trade and small businesses, the bank announced Thursday.
Thanks to the financing package, QNB Finansbank will ramp up trade activities and lending to small businesses amid the coronavirus pandemic, said an EBRD statement.
Half of the funding will back trade finance activities such as guarantees to international confirming banks, taking the political and commercial payment risk of international trade transactions, while the rest will be on-lent to local companies suffering from the pandemic’s fallout.
“Our financing for QNB Finansbank has three important goals: to provide finance needed to keep trade flowing, to bridge the liquidity gap for companies under stress, and to strengthen the resilience of the Turkish banking sector,” said Arvid Tuerkner, EBRD managing director for Turkey.
Stressing that SMEs are the locomotive of the economy, Temel Guzeloglu, the Turkish bank’s CEO, said:
“Financing provided by the EBRD will support SMEs that experience liquidity problems and help them maintain cash flows while minimizing the effects of the pandemic.”
The loan will pave the way for QNB Finansbank customers to take advantage of long-term financing at lower costs, Guzeloglu stressed.
In parallel, QNB Finansbank has mobilized $255 million from nine international lenders, and has agreed to a €25 million ($27 million) loan from Proparco, a French development financial institution, to support agriculture.
The EBRD said it stands ready to provide support worth €21 billion ($23 billion) in 38 emerging markets to deal with the pandemic’s impact over the 2020-21 period.
As a major investor in Turkey, the European bank has invested almost €12 billion ($13 billion) in various sectors since 2009.
The EBRD’s €6.7 billion ($7.5 billion) Turkey portfolio is the largest among the 38 economies where the bank invests.