The EIF and KfW, the German Promotional Bank, are supporting Sekerbank’s covered bond programme backed by loans to small and medium sized enterprises (SME) in Turkey. This transaction allows Sekerbank to develop and grow its SME lending activities and to secure additional funding for businesses in Turkey. With its strong links to the rural community Sekerbank will allow over 28.000 businesses across the country to have easier access to finance. Thanks to KfW’s funding and to the EIF’s guarantee, Sekerbank can provide up to an additional EUR 50m of support for SMEs in Turkey.

Commenting on the deal, EIF Chief Executive, Richard Pelly said: “The EIF is delighted to support funding for the first SME covered bond in Turkey benefitting local businesses. This activity complements a broad range of further SME initiatives supported by the EIF in Turkey. We hope that this will lead to further SME related capital market activity, providing necessary support for this vital part of the economy”.

KfW supports the Turkish SME and microfinance sector in various projects for many years. With the Sekerbank covered bonds deal a substantial contribution to capital market development and broadening of the Turkish financial sector in is made.

The covered bonds will provide support for SME lending for the next three years, subject to annual renewals. To date, covered bonds as a means of funding, has remained relatively untapped by Turkish originators despite its potential for growth. This deal will allow the bank to access capital markets on a longer term basis and might encourage further banks to follow suit.

Zeki Önder, the Executive Vice President of Financial Institutions and International Funding at Sekerbank has emphasized:

“We are happy to have EIF and KfW’s support for this ground breaking transaction. Sekerbank has always placed SME’s at the core of its activities. With this transaction, we have created a structure that ensures continuous longer term funding for our SME customers. This is the first covered bond in Turkey and the first SME covered bond globally. It has also been awarded with 'The Covered Bond of the year' by EMEA Finance".

About the EIF

EIF's central mission is to support Europe's small and medium-sized businesses (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, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 6bn at end 2011. With investments in over 370 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF guarantees loan portfolio totalled over EUR4.4bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

The EIF is continuing to play an important role in reviving the EU securitisation market and since the financial crisis, has already supported significant securitisation deals including transactions with KfW, Lloyds and UniCredit banks.

About KfW

KfW is one of the world’s leading and most experienced promotional banks. We apply our expertise and strength to sustainably improve the economic, social and ecological conditions of people’s lives. Established in 1948 as a public law institution, KfW is today owned 80 % by the Federal Republic of Germany and 20 % by the federal states (“Länder”). With a balance sheet total of 494 billion, KfW is one of Germany’s three largest banks. As a bank with no branch network or customer deposits, KfW refinances its lending business almost exclusively in the international capital markets. In 2011 this was more than EUR 79 billion.

KfW’s main activities are:

• Promotion of small and medium-sized enterprises and business start-ups

• Programmes for the housing sector, environmental protection and education finance for retail customers

• Financing programmes for municipalities and regional promotional banks

• Promotion of developing and transition countries

• Asset securitisation

About Sekerbank

Established in 1953, Şekerbank serves in the fields of Corporate and Commercial Banking, Retail Banking, Enterprise and Agricultural Banking, and SME Banking. Being the first bank entering the ISE Corporate Management Index in Turkey, Şekerbank has 272 branches and 11 regional directorates (3 in Istanbul, and 8 in Anatolia). Şekerbank renders internet banking services over www.sekerbank.com.tr and phone banking services on 444 78 78. The affiliates of Şekerbank include Şeker Yatırım (Investment Banking), Şeker Factoring, Şeker Leasing, Şekerbank Kıbrıs Ltd. (Commercial Banking), and Şeker Finans (Mortgage). Şekerbank is considered Turkey’s “key bank” in community banking, for its approach to locals, producers, craftsmen and SMEs.

Contacts:

David Yormesor, EIF Communications Unit, tel +352 426 688 346, e-mail: d.yormesor@eif.org
Şimşek Aybala, Corporate Communication Department Head, tel +90 212 319 7115, e-mail: aybala.simsek@sekerbank.com.tr