WASHINGTON, May 22, 2018 - The World Bank’s Board of Executive Directors today approved a US$400 million loan for the Inclusive Access to Finance Project in Turkey. The Project’s aim is to improve access to longer-term finance for (i) women-inclusive enterprises and (ii) enterprises in less developed sub-regions affected by the influx of Syrians Under Temporary Protection (SuTP).
The Project, guaranteed by the Government of Turkey, will be intermediated by Turkey’s Industrial Development Bank (TSKB), which will be the borrower and implementing agency. At least 60 percent of the total IBRD loan amount will be earmarked for Small and Medium Enterprises (SMEs) defined as firms employing fewer than 250 people. To ensure a balanced allocation of resources between the two target groups of beneficiaries, at least 30 percent of the total IBRD loan amount will be allocated to women-inclusive companies[i], and at least 30 percent will be allocated to companies operating in less developed sub-regions[ii].
“The World Bank has been working through various channels to expand the availability of long-term finance in Turkey. Businesses led by women face particular constraints to obtaining finance, and this project is expected to help participating banks to expand their outreach to such businesses,” said Johannes Zutt, World Bank Country Director for Turkey, on the occasion of the loan approval. “At the same time, Turkey hosts over three million Syrians who have been displaced by the war in their country, and many Syrian refugees live in parts of Turkey that were already less developed. Besides helping women-inclusive businesses, this project also aims to provide better access to finance to businesses active in areas with large refugee communities, thus expanding job opportunities for both the refugees and the Turkish communities that are hosting them”.
The project is fully consistent with Turkey’s Country Partnership Framework (CPF) for FY18-FY21. The project directly supports two strategic objectives stated in the CPF: (i) enhanced access to finance to underserved segments; and (ii) increased labor force participation of women and vulnerable groups.
The lending instrument for the project is an IBRD Flexible Loan with a variable spread and 29-year maturity, including six years of grace period, level principal repayments and a commitment-linked repayment schedule.
[i] Women-inclusive enterprises, defined as: (i) owned by women (i.e., with at least one female shareholder with properly documented representative and managing powers[i]); or (ii) managed by women (i.e., with at least one female C-level[i] manager or with at least 25% female representation in mid-level management[i]); or (iii) employing a ratio of women that is higher than the average ratio observed in the respective sector
[ii] Less developed sub-regions include 11 NUTS-II sub-regions (out of the country’s 26 NUTS-II sub-regions), mostly in the south-eastern half of the country, out of which 7 are priority regions, mostly along the border with Syria