MICROCAPITAL BRIEF: IFC Lends Burgan Bank of Turkey $60m to Boost Local SMEs’ Access to Finance

The International Finance Corporation (IFC), a member of the World Bank Group, recently announced it has loaned USD 60 million to Burgan Bank A.S., the Turkish subsidiary of Kuwait’s Burgan Bank Group.The loan has a term of six years and is made up of USD 40 million from IFC and USD 20 million from the IFC Managed Co-Lending Portfolio Program (MCPP), an instrument that allows institutional investors to invest passively in IFC’s lending operations. Burgan Bank will use the funds to increase access to finance for small and medium-sized enterprises (SMEs). Despite SMEs accounting for approximately 90 percent of Turkey’s economy, they receive approximately 27 percent of total value of bank loans in the country.

Manuel Reyes-Retana, IFC’s Regional Industry Head of the Financial Institutions Group in Europe, the Middle East and North Africa, noted that “there is broad recognition that SME growth will be a central driver of economic growth over the next decade. SMEs form the backbone of the Turkish economy but often struggle to reach their potential. Financial institutions like Burgan Bank can play a significant role in expanding resources to these businesses so they can innovate, create jobs and tap into global markets.”

As of year-end 2015, IFC has 184 member countries that drive its policies and approve disbursements. As of the same year, IFC reported total assets of USD 87.5 billion, net income of USD 445 million and return on average assets of 0.5 percent. Burgan Bank reported total assets of TRY 10.7 billion (approximately USD 3.6 billion) and a net profit of TRY 52 million (approximately USD 17 million) for the financial year ended December 2015. Burgan Bank employs approximately 1,022 employees in 56 branches in Turkey.

By Imke Herholdt, Research Associate

About International Finance Corporation
The International Finance Corporation (IFC), a US-based member of the World Bank Group, offers loans, equity investments, technical assistance, and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of year-end 2015, IFC has 184 member countries that drive its policies and approve disbursements. As of the same year, IFC reported total assets of USD 87.5 billion, net income of USD 445 million and return on average assets of 0.5 percent.

About Burgan Bank A.S.
Burgan Bank A.S. is 99.3-percent owned by Burgan Kuwait, a bank based in Kuwait. Burgan Kuwait is majority owned by Kuwait’s Project Company (KIPCO), a member of the Kuwait Stock Exchange that operates in the financial services, media, manufacturing and real estate investments sectors across the Middle East and North Africa (MENA). Burgan Bank reported total assets of TRY 10.7 billion (approximately USD 3.6 billion) and a net profit of TRY 52 million (approximately USD 17 million) for the financial year ended December 2015. Burgan Bank employs approximately 1,022 employees in 56 branches in Turkey.

Sources and Additional Resources
[1] IFC: IFC Extends $60 Million to Burgan Bank to Boost Access to Finance for Small Businesses in Turkey
[2] MicroCapital Universe Profile: IFC
[3] Burgan Bank
[4] MicroCapital Universe Profile: Burgan Bank

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