The EIF and Finansbank have extended their guarantee agreement under the Micro-Credit Window of the Competitiveness and Innovation Framework Programme (CIP) helping to provide additional finance for Turkish businesses.

In addition to the TRY 435 million (c. EUR 206 million) of loans guaranteed under two CIP agreements since March last year, SMEs in Turkey can now have access to an extra TRY 350 million (c. EUR 180 million), which will help to further support new entrepreneurs and create new jobs.

The initial Micro-Credit CIP guarantee agreement signed in 2010, led to the creation of a new product “New Companies Support Package”, targeting micro-enterprises in their start-up phase. Due to the high take up of this new product and strong demand from micro-entrepreneuers in Turkey, the EIF and Finansbank have decided to increase the amounts available to Turkish micro businesses.

Mr Olivier Edelman, Guarantees & Securitisation at EIF, said “This contract extension demonstrates the role Finansbank is playing in helping to enhance access to finance for local entrepreneurs. We are confident that this additional TRY 350 million will help support even more micro-business in Turkey in the coming months”.

Commenting on the transaction, Temel Güzeloğlu, CEO at Finansbank said: “SME Banking continues to be one of our priority segments. We aim to provide high quality services and a unique product portfolio for SME customers. Since collateralization is one of the major problems for SMEs when they try to obtain financing to sustain and grow their businesses, our cooperation with EIF helps SMEs overcome a major hurdle. We have granted loans exceeding TRY 250 million (c. EUR 125 million) to more than 6.000 SMEs in cooperation with EIF to date. With this extra limit, we are planning to grant new loans to at least 12 to 15,000 SMEs, which I believe will be essential for Turkish SMEs intending to grow their businesses.”

Background information:

The Competitiveness and Innovation Framework Programme (CIP), which spans from 2007 to 2013, has been put in place to boost European productivity, innovation capacity and sustainable growth, whilst simultaneously addressing complementary environmental concerns.

Within the framework of the CIP, the EIF has been allocated EUR 1.1bn to be split between venture capital – with the High Growth and Innovative SME Facility (GIF) – and guarantees – with the SME Guarantee Facility (SMEG).

Under the SMEG, financial institutions are encouraged to enhance access to finance for SMEs. The facility offers an excellent tool to allocate additional financing volumes for those SMEs that would not otherwise have access to resources and financial engineering instruments because of the increased lending risk entailed. As such, the SMEG complements and broadens EIF’s own product offering.

The EU CIP SMEG Facility gives the EIF the opportunity to play an essential role in supporting sustainable job creation and entrepreneurship in European SMEs.

About Finansbank

Finansbank is relatively a young Bank in the Turkish Banking system, which was established on October 26, 1987. Since its establishment, Finansbank has grown to become the 5^th biggest private bank in Turkey. The key factors that brought Finansbank to its successful position today is its qualified staff and dynamic business structure. Finansbank is one the first banks in Turkey that has focused on SME financing. Finansbank is serving more than 300.000 SME customers. With 750 enterprises receiving loans from Finansbank everyday, the SME loan portfolio reached approximately to Euro 2.5 bn as of today.

SME Banking’s share in Finansbank’s TL cash loans is 18% and this portion is growing every year. SME Banking has also considerable share in TL demand deposit volume. Finansbank aims to help SMEs in Turkey to grow and stimulate job creation. With this in mind, Finansbank’s SME Banking Team strives not only to be a bank for the SMEs but more importantly to be their reliable business partner with creative and unique products and high quality service

About EIF

The EIF central mission is to support Europe’s SMEs by helping them to access finance. EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Contacts:

EIF: David Yormesor, tel +352 426 688 346, e-mail: d.yormesor@eif.org

Finansbank: www.finansbank.com.tr