IFC, a member of the World Bank Group, is partnering with the Black Sea Trade and Development Bank and FMO, the entrepreneurial development bank of the Netherlands, to provide a $105 million subordinated loan to ABank in Turkey, IFC reported.
The loan will help ABank expand its capital base and increase lending to small and medium enterprises, which represent nearly 99 percent of all businesses and 75 percent of total employment in the country.
IFC is lending $50 million and has helped mobilize $30 million from Black Sea Trade and Development Bank and $25 million from FMO. The 10-year loan will be the first syndicated subordinated facility in Turkey to qualify as Tier II capital, which is the second-most reliable form of capital in regulatory terms.
"The support extended to ABank by IFC, BSTDB, and FMO demonstrates the bank's solid standing and also confirms its increasing penetration in the small and medium enterprise segment," said Hamit Aydoğan, CEO of ABank. "The facility will further strengthen ABank's capital base and support its ongoing growth strategy, while expanding its balance sheet."
"ABank is a key partner for IFC in addressing the financing needs of Turkish small and midsize enterprises, which are crucial for economic development and job creation," said Dimitris Tsitsiragos, IFC Director for Middle East, North Africa, and Southern Europe. "The project once again demonstrates the significant role IFC can play in helping mobilize other resources for long-term financing, and it is a good example of cooperation between multilateral development institutions."
BSTDB said in a written statement that, "This operation will be the BSTDB's first subordinated loan in Turkey and the first operation co-financed by IFC within the framework of the Master Cooperation Agreement, signed last year. The loan will considerably benefit ABank and subsequently its small and medium enterprise clientele. The bank simultaneously contributes to other multilateral institutions as a complementary financier to maximize their support of development in critical regions of the world."
Jurgen Rigterink, FMO Chief Investment Officer, said, "Our cooperation with IFC and BSTDB has been fruitful, and our subordinated loan to ABank will be fully dedicated to supporting the growth of Turkish SMEs and the bank's capital base."