Brussels, 25/10/2010 (Agence Europe) - On Friday 22 October, the European Investment Bank (EIB) and the European Investment Fund (EIF) signed agreements worth a total of €280 million with several Turkish financial institutions for small and medium-sized enterprises (SMEs) and micro-enterprises in Turkey's least developed provinces.
The agreements consist of €250 million in EIB loans and €30 million in EIF guarantees. As the EIB partner banks will match the loan amount with an equivalent from their own resources, a total of €500 million will be made available to SMEs.
This innovative SME funding instrument called the Greater Anatolia Guarantee Facility (GAGF) was devised in partnership with the Republic of Turkey and the EU Commission and major Turkish banks. Initially launched in July by Turkish Minister of Industry and Trade Nihat Ergün, it will provide tailor-made financial help to SMEs and micro-enterprises. The facility covers 43 of the least developed provinces in Turkey stretching from Kastamonu, Samsun, Kayseri and Kahramanmaraº to Kars and Van in the East of Turkey. Though these provinces are home to 25% of the country's SMEs, they receive only 10% of the country's SME lending. SMEs in these regions will benefit from loans and guarantees provided by the EIB Group's five partner banks in GAGF: Akbank, Denizbank, Halkbank, Vakýfbank and Yapý Kredi. The first-loss portfolio guarantees from the EIF are backed by EU funding from the Instrument for Pre-Accession Assistance (IPA). Additionally, micro-enterprises operating in these regions will benefit from a guarantee provided by the Kredi Garanti Fonu (KGF) for which a counter-guarantee is provided utilising IPA funds. (O.L./transl.rt)