KfW: strengthening Turkish SMEs

• KfW grants promotional loan for EUR 200 million to Turkey’s VakıfBank
• Promotion of micro, small and medium-sized enterprises
• Jobs created and preserved

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), KfW has granted a promotional loan for EUR 200 million to Turkey’s VakıfBank under the German Federal Government’s guarantee cap.

In providing the loan, KfW is supporting the development of micro, small and medium-sized enterprises (MSMEs) in Turkey, whose access to financing is being improved through VakıfBank. Some of the funds will be paid out to MSMEs based in the least-developed regions in Eastern and South-Eastern Anatolia and to micro enterprises in general.

The MSME sector plays a decisive role in Turkey’s national economy. More than 90% of Turkish companies fall under this category. They employ more than 70% of the working population. Despite being a cornerstone to the economy, MSMEs are faced with insufficient financing offers from banks.

“We are helping Turkey to overcome this key obstacle to development. The loan makes it easier for entrepreneurs who run micro, small and medium-sized enterprises to access credit. It will also increase their competitiveness and contribute to jobs being created and preserved in Turkey,” said Dr Norbert Kloppenburg, Member of the KfW Group Executive Board.

VakıfBank, which operates as a universal bank, has greatly expanded its segment for financing microborrowers and SMEs over the last few years, and is offering them excellent accessibility, particularly in rural areas, due to its national network comprising around 900 branches.

Since 1960, KfW Development Bank has committed around EUR 5.4 billion to Turkey (approx. EUR 3.5 billion in budget funds, approx. EUR 1.9 billion in KfW’s own funds) on behalf of the German Federal Government, as well as EUR 0.12 billion in mandate funds for projects – particularly in the focal areas of energy, the financial sector, water supply and waste water disposal.

Further information on KfW Development Bank is available at: www.kfw-entwicklungsbank.de.