TR Third Access to Finance for SMEs (SME III)

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The objective of the Third Access to Finance for Small and Medium Enterprises Project for Turkey is to improve access to medium and long-term finance for small and medium enterprises through lease financing. The single project component will provide US$300 million to be intermediated by Ziraat Bank through leasing companies and banks targeting Small and Medium Enterprises (SMEs) through lease financing. The credit line, guaranteed by the Turkish government, will be intermediated by Ziraat Bank, which will be the Borrower and implementing agency for this project. Ziraat Bank will in turn on-lend funds through Participating Financial Institutions (PFIs), which can be banks and leasing companies. Ziraat Bank will select PFIs pursuant to criteria agreed between Ziraat Bank and the World Bank, and subject to no objection by the World Bank. The selected PFIs will in turn make sub-loans to private SMEs, the final beneficiaries of the credit line. The PFIs will assume the credit risk of the sub-borrowers who will be selected based on agreed upon selection criteria. Ziraat Bank will have exposure only to the selected PFIs and will assume the credit risk for lending funds to PFIs.