Garanti Bank - MSME Loan

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The EBRD is considering providing EUR 20 million senior loans to each of Deniz Bank (DB) and Garanti Bank (GB) to on-lend to Micro, Small and Medium Enterprises (MSMEs) in Turkey. Potential syndication, co-financing with other IFIs and the local currency funding will be considered. The purpose of the project is to expand the banks’ franchise in the underserved regions and for specific sectors (e.g., primary agriculture). EBRD’s financing will also assist these banks in diversifying and lengthening banks’ funding base. Transition impact will arise through market expansion which will be achieved by providing medium and long term financing through these leading banks which are willing to expand their franchise in the regions and for specific sectors and purposes (e.g., small agriculture and women entrepreneurship) using their large distribution networks where it can play a role in expanding capital flows to MSMEs in under-served regions or sectors. Subject to market conditions, the Bank will endeavour to maximize the extent to which these operations are undertaken through TRL-denominated loans and syndicated / co-financed facilities. Garanti Bank is the third-largest bank in Turkey and the second largest privately-owned bank by total assets. GB plans to expand its MSMEs lending, one of the core segments, by developing tailor-made approaches including an MSME portal website as well as through its wide branch network. Senior loans of EUR 20 million to each Deniz Bank and Garanti Bank with potential co-financing / syndication and local currency funding. Up to EUR 50 million. The project is screened FI as this project involves the provision of finance to financial intermediaries. DB and GB will be required to comply with the Bank’s Performance Requirements for Financial Institutions (specifically, PR2: Labour and Working Conditions and PR9: Financial Intermediaries). The banks will implement the EBRD's Environmental and Social Procedures for Small and Micro Loans. The banks will also be required to adhere to the EBRD's Environmental and Social Exclusion and Referral Lists, and submit annual environmental and social reports to the Bank. The possibility of providing technical cooperation will be assessed during the project implementation for targeted assistance to increase and expand the MSME portfolios of the partner institutions in the economically depressed regions in the South East and East of Turkey. Garanti Bank Koray Alus Structured Finance Aytar Cad Nispetiye Mah no. 2 Zincirlikuyu Besiktas Phone: 90 212 318 1733 Fax: 90 212 216 6217 E-mail: korayal@garanti.com.tr