Istanbul Bilgi University

completed

Bilgi, which graduated its first class in June 1998, is undertaking this project in response to its rapid growth and to the increasing demand for university education in Turkey. Since it opened its doors in 1995, Bilgi’s student enrollment increased five-fold, from 914 to over 5,000 students. At the same time, its faculty increased from 70 to 339. It has achieved this growth by providing first-class social science instruction to a mostly urban population that thrives on the university which offers a variety of traditional core courses, as well as courses in communications, film and television and jazz. The University serves its urban community by providing free instruction in English, accounting, and computer training. It also has film festivals, produces shows for local TV stations, and promotes art exhibits. IFC Role: Turkey’s financial sector has been unable to provide adequate local currency financing to support long-term investments, especially for not-for-profit institutions. Financing for these institutions is limited to short-term loans at high spreads or leasing because they are considered “frontier” sectors and risk assessment is complicated by their not-for-profit status. Yet they provide important social services that are directly linked to improving the social capital of the country. Consequently, the role of IFC is especially important, as it is the only major source of long-term project financing for these clients. With this first investment in a private university in Turkey, IFC would demonstrate the financial viability of these institutions, structuring innovate ways for securing its loans, while applying some governance measures commonly found in well-managed private companies. Economic Benefits/Development Impacts: IFC’s investment in education will help speed the diffusion of best practices to the public education system. IFC is emphasizing investments that will deliver quality education in a cost-efficient manner. The focus is on projects that will enhance competition and best practices, while increasing places for students across the system and relieving the pressures for additional places in the public university system. The Bilgi expansion is serving a growing demand for higher education in Turkey. Growing numbers of secondary school graduates and a relatively strong private sector are creating ample numbers of applicants for Bilgi’s program. Bilgi University has so far contributed over US$5.0 million in kind to the three neighborhoods where its campuses are located. These have taken the form of English language and computer training, training in accounting and teacher training. In addition, Bilgi donated a primary school to the municipality. Since 1998, over 1,500 participants have benefited from Bilgi’s community programs. In addition, several small businesses, catering to students’ needs, have flourished in the neighborhoods where the campuses are located, and public services, such as transportation and housing, have improved.