The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral financial institution, is considering offering a loan of EUR 75 million (USD 104 million) to Turkish commercial bank DenizBank for on-lending to small and medium-sized enterprises (SMEs) in the agribusiness sector. EBRD would provide the funds in two phases, starting with an initial disbursement of EUR 50 million (USD 69 million) followed by the remaining EUR 25 million (USD 35 million) at an unspecified date. The funds will be disbursed via senior, unsecured loans or through bond investments. The deal seeks to increase funding deemed “long-term” for start-ups and other investment projects.
DenizBank was founded in 1938 and is based in Istanbul, Turkey. It is owned by Russian commercial bank Sberbank. As of 2013, DenizBank reported return on equity of 22.2 percent and assets of TRY 79.7 million (USD 35.6 million). As of 2013, Sberbank reports assets of RUB 18.2 trillion (USD 546 billion). EBRD provides loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.
By Meraj Husain, Research Associate
About European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 61 countries as well as the European Investment Bank and the European Union as of 2012. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.
Sources and Additional Resources
[1] European Bank for Reconstruction and Development: “Denizbank Agri Financing Facility – Tranche 1 DPR,” http://www.ebrd.com/pages/project/psd/2014/46106.shtml
MicroCapital, March 17, 2014, “European Bank for Reconstruction and Development (EBRD) Considers $21m Loan to Compagnie Internationale de Leasing (CIL) for Micro-, Small, and Medium-sized Enterprises (MSMEs) in Tunisia,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-considers-21m-loan-to-compagnie-internationale-de-leasing-cil-for-micro-small-and-medium-sized-enterprises-msmes-in-t/
MicroCapital, February 5, 2014, “European Bank for Reconstruction and Development (EBRD) Lends $14m to Societe Generale Banka Montenegro to Support On-Lending for Housing,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-14m-to-societe-generale-banka-montenegro-to-support-on-lending-for-housing/
MicroCapital, February 2, 2014, “European Bank for Reconstruction and Development (EBRD) to Loan $25m to Belvnesheconombank (BelVEB) of Belarus to Support On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs),” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-to-loan-25m-to-belvnesheconombank-belveb-of-belarus-to-support-on-lending-to-micro-small-medium-sized-enterprises-msm/
MicroCapital, January 8, 2014, “European Bank for Reconstruction and Development (EBRD) Loans $4m to Microfund for Women (MFW) of Jordan to Support Onlending to Female Entrepreneurs,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-4m-to-microfund-for-women-mfw-of-jordan-to-support-onlending-to-female-entrepreneurs/
MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
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