MICROCAPITAL BRIEF: EFSE Lending $25m to Turkey’s Yapi Kredi Leasing for Micro-, Small Enterprises (MSEs)

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle, recently indicated that it intends to lend USD 25 million to Turkey’s Yapi Kredi Leasing, “the largest subsidiary of Yapi Kredi Bank.” EFSE expects the proceeds to fund approximately 1,000 leases to micro-, small enterprises (MSEs).

EFSE Board Chair Christoph Tiskens stated that the loan “advances a number of our objectives: increased access to finance, support for small business and rural areas, and our main goal, promoting economic development and prosperity.”

Founded in 1944, Yapi Kredi Bank is a privately owned institution that offers private, retail, commercial and corporate banking services through approximately 1,000 branches in Turkey. In 2016, it reported total assets of TRY 271.1 billion (USD 75.7 billion), deposits of TRY 157.1 billion (USD 43.9 billion) and 11.4 million customers. As of 2016, the bank’s leasing subsidiary holds 19.9 percent of the market for leasing receivables in Turkey. Financial information specific to Yapi Kredi Leasing is not available.

EFSE provides “long-term” funding in Southeast Europe and parts of Central Asia to financial institutions that serve micro- and small enterprises as well as private households. EFSE also operates a development facility through which it provides consulting and training services to these institutions. EFSE was established in 2005 by German development bank Kreditanstalt für Wiederaufbau (KfW) with the financial support of the EU’s European Commission and the German Federal Ministry for Economic Cooperation and Development, which is also known by its German acronym BMZ. The fund 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. EFSE operates in 16 countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, Ukraine, Turkey and the Former Yugoslav Republic of Macedonia. As of 2017, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised. As of 2016, EFSE reported a gross loan portfolio of EUR 957 million (approximately USD 1.0 billion).

By Jacob O’Driscoll, Research Associate

Sources and Additional Resources

European Fund for Southeast Europe Loan to Yapi Kredi Leasing

https://www.efse.lu/news-events/news/detail/efse-lends-usd-25-mln-to-yapi-kredi-leasing-to-support-small-business-rural-areas/

European Fund for Southeast Europe

https://www.efse.lu/

Yapi Kredi Leasing

https://assets.yapikredi.com.tr/WebSite/_assets/pdf/en/investor-relations/2016_annual_report_final.pdf

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