Financing support from the World Bank to small and medium-sized Turkish exporters

The World Bank Board of Executive Directors approved a partial credit guarantee of 250 million euros to be provided to Turk Eximbank for the Turkey Long-Term Export Financing Guarantee Project.

In the statement made by the World Bank, it was stated that the project aims to increase access to long-term financing for export-oriented small and medium-sized enterprises (SMEs) with less than 250 employees and medium-large scale enterprises with 250-1500 employees.

It was stated in the statement that at least 70 percent of the guaranteed loan amounts will be used for sub-loans to be provided to export-oriented SMEs, and at least 10 percent of the guaranteed loan amounts will be allocated to loans to women-inclusive companies.

Helping export companies transition to the post-Covid-19 era

In the statement, it was stated that the partial credit guarantee will allow Turk Eximbank to provide long-term financing of up to 500 million euros for commercial creditors, and commercial creditors will allow them to provide working capital and investment sub-loans to exporting private sector enterprises.

It was stated in the statement that the loan guarantee in question will help Eximbank to obtain longer maturity and lower total costs compared to the loans currently provided without guarantee, and that the market financing provided with the guarantee support will also enable Eximbank to provide sub-loans to eligible SMEs and medium-large scale exporters. It was reported that he would recognize it.

The following statements were made in the World Bank’s statement:

“To achieve sustainable and rapid export growth in the long term, exporters will need to become more competitive by producing high-quality goods at more attractive prices, expanding product ranges for fast-growing market segments, and increasing their production of more capital-intensive, technologically sophisticated goods, all of which require new investments.” “However, due to the effects of the new type of coronavirus (Covid-19) epidemic, it is necessary to help eligible exporting companies transition to the post-Covid-19 period.”

“It will help Turkey continue its participation in global value chains”

World Bank Turkey Director Auguste Kouame, whose views were included in the statement, stated that in the short term, Turkey’s export capacity, whose companies were affected by the Covid-19 crisis, will need to be preserved and exporting companies will need to survive and contribute to the future recovery.

Kouame said, “This project will contribute to the uninterrupted and greater access of eligible export companies to financing during this difficult period we are going through. Therefore, it will help Turkey to continue its participation in global value chains.” made his assessment.

Task Team Leader of the project, Alper Oğuz, stated that financing SMEs’ efforts to upgrade technology and increase productivity is of great importance for Turkey to achieve its “ambitious” export increase targets.

It will strengthen Eximbank’s capacity to obtain long-term financing

Within the scope of the Turkey Long-Term Export Finance Guarantee Project, export-oriented small and medium-sized enterprises and medium-large enterprises receiving loans from Eximbank will be the main direct beneficiaries of the project.

The project will strengthen Eximbank’s capacity to obtain long-term financing in international markets and channel this financing into long-term loans to export businesses, including SMEs and women-inclusive companies.

The project, which focuses on three strategic objectives determined as growth, inclusion and sustainability and is compatible with the Turkish Country Cooperation Framework (CPF) covering the period 2018-2021, will contribute to the CPF targets by increasing access to finance for underserved markets and employment with competitiveness in selected sectors.

The project will also be in line with the World Bank Group’s approach to support countries to reduce the effects of the Covid-19 epidemic on economies, companies and employees.

Source: https://www.aa.com.tr/tr/ekonomi/dunya-bankasindan-kucuk-ve-orta-olcekli-turk-ihracatcilarina-finansman-destegi/1876937

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