Greater Anatolia Guarantee Facility (GAGF) reached more than 3,500 in developing regions of Turkey

Launched in October 2010, GAGF aims at facilitating SMEs access to finance in Turkey’s developing regions with a combination of EUR 250 million of lending by the European Investment Bank (EIB) and portfolio guarantees by the European Investment Fund (EIF) – together the EIB Group. With the partner banks providing another EUR 250 million in loans from their own resources, bringing the volume of the total support up to EUR 500 million, the facility gives a significant boost to SME financing in the region.

GAGF covers 43 developing provinces stretching from Kastamonu, Samsun, Kayseri and Kahramanmaraş to Kars and Van in the East, home to 25% of Turkey’s SMEs, who historically receive only 10% of the country’s SME lending. SMEs in these provinces continue benefiting from loans and guarantees provided by five partner banks: Vakıfbank, Halkbank, Denizbank, Yapı Kredi and Akbank. The EU provided EUR 24 million financing for the project under the Instrument for Pre-Accession Assistance (IPA), complemented by a national public contribution of EUR 8 million.

Richard Pelly, EIF Chief Executive added: “GAGF is an effective tool to facilitate SME lending in the less developed provinces of Turkey. The volumes already deployed are significant and we are very pleased to be able to scale up the support for this dynamic segment of the economy.

GAGF Steering Committee will hold its third annual meeting on 21 June in Van, a province in the target region severely hit by an earthquake last year. This will be followed by an event open to participation of SMEs to increase their awareness of the facility on 22 June between 10.00 and 12.00 at the premises of Van Chamber of Commerce and Industry.

About the Greater Anatolia Guarantee Facility (GAGF) 

GAGF is an EIB Group initiative to increase SMEs access to finance in developing regions. The facility comprises three main pillars: The first pillar is a counter-guarantee agreement for EUR 5 million with the Kredi Garanti Fonu (KGF), which provides guarantees to micro-enterprises in the target region. The second pillar, with a commitment of EUR 25 million, is a direct guarantee provided to five partner financial intermediaries, Akbank, Denizbank, Halkbank, Vakıfbank and Yapı Kredi, which aims to generate an overall, new SME loan portfolio of EUR 500 million in the target region. The third pillar comprises EUR 2 million earmarked for capacity building and promotion of the facility. The European Investment Bank is contributing EUR 250 million in loans.

Programme provinces are Erzurum, Erzincan, Bayburt, Ağrı, Kars, Iğdır, Ardahan, Malatya, Elazığ, Bingöl, Tunceli, Van, Muş, Bitlis, Hakkari, Gaziantep, Adıyaman, Kilis, Şanlıurfa, Diyarbakır, Mardin, Batman, Şırnak, Siirt, Hatay, Kahramanmaraş, Osmaniye, Kayseri, Sivas, Yozgat, Kastamonu, Çankırı, Sinop, Samsun, Tokat, Çorum, Amasya, Trabzon, Ordu, Giresun, Rize, Artvin, and Gümüşhane. Programme’s financial intermediaries are Akbank, Yapi Kredi, Vakifbank, Halkbank and Denizbank for SME loans and Kredi Garanti Fonu for micro-credits.

GAGF is co-financed by the EU and the Republic of Turkey under the IPA Component III – Regional Development and is managed by the European Investment Fund.

About the EIF

EIF's central mission is to support Europe's micro, small and medium-sized businesses) by helping them to access finance.  EIF primarily designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, entrepreneurship, regional development, growth, and employment. EIF’s total net commitments to venture and growth capital funds amounted to over EUR 5.9bn at end 2011. With investments in over 370 funds, EIF is the leading player in European venture and growth capital due to the scale and the scope of its investments, especially in the high-tech and early-stage segments. EIF’s commitment in guarantees totalled over EUR 4.4bn in over 220 operations at end 2011, positioning it as a major European SME loan guarantees actor and a leading microfinance guarantor. www.eif.org

Contacts for further information:

• On the event of June 22, 2012: Ms. Ozlem Cotuk, Project Manager, o.cotuk@eif.org
• Press enquiries: Ms. Joelle Harvey, Press Officer, j.harvey@eif.org