MICROCAPITAL BRIEF: Sekerbank Borrows $146m from European Fund for Southeast Europe (EFSE), European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC) to Fund Agricultural, Women-owned Businesses in Turkey

Sekerbank, a Turkish private bank, has borrowed EUR 59.5 million (USD 82 million) from the European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution; EUR 36.3 million  (USD 50 million) from the International Finance Corporation, a member of the US-based World Bank Group; and EUR 10 million (USD 13.7 million) from the European Fund for Southeast Europe (EFSE), a Luxembourg-based, EU-backed microfinance investment vehicle [1] [2]. The funding is intended to be used for loans to micro-, small, and medium-sized enterprises that involve agriculture as well as those in other sectors that are owned by rural women [2]. EBRD will also provide technical assistance to Sekerbank to develop unspecified new financial products [1].

As of December 2012, Sekerbank reports total assets of USD 7.3 billion, total deposits of USD 5.1 billion, return on assets of 1.66 percent and return on equity of 13.17 percent. As of June 2013, EFSE reports an investment portfolio of EUR 774 million (USD 1 billion). As of December 2012, IFC reports 184 member countries, total assets of USD 76 billion and return on equity of approximately 5 percent.

By Megan McGowan, Research Associate

About Sekerbank:

Founded in 1953, Sekerbank made an initial public offering in 1997, and its current shareholders include Sekerbank Pension Fund and Turan Alem Securities, which each hold 33.98 percent of the shares of the institution. Sekerbank provides banking products and services to small and medium-sized enterprises. It has a network of 256 branches, 10 district offices and 1 foreign representative office in Cologne, Germany. As of December 2012, Sekerbank has total assets of USD 7.3 billion, total deposits of USD 5.1 billion, return on assets of 1.66 percent, return on equity of 13.17 percent and a capital adequacy ratio of 16.08 percent.

About European Bank for Reconstruction and Development: (EBRD):

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is owned by 64 countries as well as the European Investment Bank and the European Union as of 2013. It aims to finance operations that are both commercially viable and assist development in 29 countries 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 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects across 34 countries.

About European Fund for Southeast Europe (EFSE):

The European Fund for Southeast Europe (EFSE) was established in 2005 by Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW), a German development bank, with financial support from the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung) and the European Commission of the EU. EFSE seeks to aid economic development in southeastern Europe and parts of central Asia by supporting the provision of financial services to low-income households and micro- and small enterprises via local financial institutions. EFSE is privately managed, with Oppenheim Asset Management Services of Luxembourg acting as fund manager and Finance in Motion GmbH of Germany acting as fund advisor. As of 2013, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About International Finance Corporation (IFC):

A member of the US-based World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries.

Sources and Additional Resources:

[1] European Bank for Reconstruction and Development: “EBRD Offers €60 Million to Turkish Agribusiness and Women-led SMEs through Sekerbank,” http://www.ebrd.com/pages/news/press/2013/131007.shtml

[2] European Fund for Southeast Europe EFSE expands relationship with ?ekerbank in Turkey through EUR 10 million loan,” http://www.efse.lu/Press-releases—Details—2013-10-04-EFSE-expands-relationship-with—ekerbank-in-Turkey-through-EUR-10-million-loan——_nav.52_siteid.134_entryid.502_dir._likecms.html

MicroCapital Article: “MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) to Loan $20m to Bank Republic of Georgia to Support Lending to Micro-, Small Enterprises (MSEs),” October 12, 2013, https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-to-loan-20m-to-bank-republic-of-georgia-to-support-lending-to-micro-small-enterprises-mses/

MicroCapital Article: ‘MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Issues Local-currency Loan of $1.5m to First MicroCredit Company of Kyrgyz Republic,” October 6, 2013, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-issues-local-currency-loan-of-1-5m-to-first-microcredit-company-of-kyrgyz-republic/

MicroCapital Article: “European Fund for Southeast Europe to Loan $6m to Inecobank to Support Micro- and Small Enterprises (MSEs),” September 19, 2013, https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-to-loan-6m-to-inecobank-to-support-micro-and-small-enterprises-mses/

MicroCapital Universe Profile: European Bank for Reconstruction and Development (ERBD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

MicroCapital Universe Profile: International Finance Corporation, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital Universe Profile: Sekerbank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sekerbank

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