New products for businesses as EIF signs guarantee agreement under the Competitiveness and Innovation Programme in Turkey

The European Investment Fund (EIF) and Finansbank have signed two guarantee agreements totalling TRY 255 million (c. EUR 122 million) under the Competitiveness and Innovation Framework Programme (CIP) helping to provide enhanced access to finance for Turkish businesses.

SMEs in Turkey could now have access to over TRY 430 million (c. EUR 206 million) of loans guaranteed under the CIP which will help to support existing and new entrepreneurs and create new jobs.

Thanks to the CIP programme Finansbank has now designed a new "Machinery and Technology Support Package" for Turkish entrepreneurs. As part of this package these medium to long term investment loans provide SMEs with access to necessary machinery and technology essential for business growth.

The second guarantee agreement has also led to the creation of a new product "New Companies Support Package" which will target micro-enterprises in their start-up phase.

Mr Jose Romano, Head of Turkish Operations at the EIF, said "I am delighted to be here today to sign another two important guarantee agreements for Turkish businesses.

These two new products will be instrumental in providing entrepreneurs with new tools for their trades and we hope that this will lead to the creation of many more jobs in Turkey".

Commenting on the transaction, Erkin Aydın, EVP (Coordinator) Retail Banking Marketing at Finansbank said:  

"We are very proud to be the first Turkish Bank signing the guarantee agreements with EIF. It is Finansbank's mission to continuously come up with tailor made solutions to the financial requirements of the SMEs and to develop new projects for them.  

Our agreements with EIF will be a significant addition to our existing SME projects. With this application, we'll be solving one of the biggest problems of the SMEs when accessing appropriate funding, which is the difficulty of providing eligible collateral."  

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.  Finansbank has 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 400.000 SME customers. With Finansbank granting SME loans to more than 150 enterprises everyday, the SME loan portfolio reached approximately to Euro 1.7 billion as of today. 

SME Banking's share in Finansbank's TL cash loans is 21% and this portion is growing every year. Also SME Banking has 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.   

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.  

For further information, please contact David Yormesor, d.yormesor@eif.org