Luxembourg 24 September 2013
EIB Group partners with Halkbank to assist innovative enterprises in Turkey with EU support
The European Investment Bank Group is partnering with Turkiye Halk Bankasi A.S. (Halkbank) and providing a EUR 100 million facility to support innovative and research-oriented small and medium-sized companies and mid-caps in Turkey, with the financial support of the European Union (EU).
The two members of the EIB Group – the European Investment Bank (EIB) and the European Investment Fund (EIF) – engineered this operation using a guarantee facility co-developed with the European Commission (EC). This innovative partnership is being used for the first time in Turkey. The operation is structured as an EIB loan to Halkbank. It is enhanced by an EIF guarantee providing credit-risk coverage to Halkbank under the Risk-Sharing Instrument (RSI), a guarantee facility co-developed with the European Commission and backed by the financial support of the EU.
This joint effort will improve the lending conditions offered by Halkbank to the innovative companies. Halkbank will pass on the advantages by lowering both the collateral requirements and the interest rate applied to loans to SMEs and small mid-caps under this facility. In addition to longer tenors and attractive pricing, the EIB Group facility will give innovative companies access to finance, which is provided more reluctantly by the financial sector to such companies due to the relatively high levels of uncertainty and risk inherent to innovation.
Focusing on research-based and innovative enterprises will support private sector efforts to strengthen innovation capacity. Depending on the size of the sub-loans of Halkbank, some 180 to 200 innovative companies are expected to benefit from the EIB Group facility, leading to growth in private business and jobs. This joint EU effort is supported by the Seventh Framework Programme, to which Turkey is associated, and will increase access to finance for innovative SMEs and small mid-caps.
Note to the editors:
This is the first Risk Sharing Instrument (RSI) agreement in Turkey, bringing the total loan finance available to innovative businesses across the EU and/or countries associated under this initiative to well above EUR 1 billion with 14 guarantees signed in 11 countries.
The RSI facility aims to encourage banks to provide loans of up to EUR 7.5 million to SMEs and small mid-caps undertaking research, development or innovation, and seeking finance for investments and/or working capital. The RSI is a joint initiative of the EIF, the European Investment Bank (EIB) and the European Commission. It is supported by the European Union under the Seventh Framework Programme for Research and Technological Development (FP7) and uses EIF's risk-taking capacity. It is part of, and complements, the existing Risk Sharing Finance Facility (RSFF), managed by the EIB.
Under the RSI facility, the European Investment Fund (EIF) is providing guarantees to banks and leasing companies that lend to SMEs and small mid-caps. The guarantee covers, upon default, 50% of the outstanding amount of each loan. Some 25 or so banks are expected to be involved in the pilot phase, allowing the RSI to reach a total loan volume of up to EUR 2.5 billion channelled to innovative SMEs and small mid-caps.
The call is open to financial or credit institutions, established and operating in the EU and/or countries associated to FP7, including, Iceland, Liechtenstein, Norway, Switzerland, Israel, Turkey, the former Yugoslav Republic of Macedonia, Serbia, Albania, Montenegro, Bosnia & Herzegovina, the Faroe Islands and Moldova.
EIB: Helen Kavvadia, Tel.: +352 4379 84486; Mob.: +352 691 286 017; E-mail: firstname.lastname@example.org,
EIF: David Yormesor, Tel.: +352 42 66 88 346, e-mail: email@example.com