Istanbul/Washington, D.C., June 22, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, today announced the signing of a €20 million loan agreement with Finans Leasing A.S. The facility will support the company’s lending to small and medium enterprises across Turkey.
Shahbaz Mavaddat, IFC’s director for Southern Europe and Central Asia, said, “We are very pleased with this investment, which further strengthens our relationship with Finans Leasing. This project is a key element in IFC’s strategy of advancing the Turkish financial sector by supporting well-managed financial institutions and enabling its operational expansion with a focus on corporate and small business sectors.”
With this IFC funding, Finans Leasing will make loans to smaller businesses to help them finance equipment, machinery, real estate, and other expenditures.
Unlike conventional loan financing, leasing decisions are based on an enterprise’s ability to generate cash flow from a leased asset and on the security of the asset itself. For this reason, leasing is often the only financing option for enterprises that lack a lengthy credit history and significant asset base to provide collateral.
Murat Alacakaptan, general manager of Finans Leasing, said, “We have had a long and fruitful relationship with IFC over the years. This investment underscores IFC’s strong confidence in our company and will enable us to further expand our lending operations, particularly to small and medium enterprises.”
Jyrki Koskelo, IFC’s director for Global Financial Markets, added, “The transaction builds on IFC’s previous investments in Finans Leasing as we continue to assist the company in enhancing its institutional capacity. The investment highlights our use of innovative structures to meet the needs of our clients in an effective way.”
IFC has played a major role in developing the Turkish leasing industry since the mid-1980s, when it assisted the drafting of Turkey’s leasing legislation. The Finans Leasing deal is in line with IFC’s strategy to increase the availability of long-term funding to small and medium enterprises. Financial intermediaries such as Finans Leasing provide an important intermediation role in the economy by focusing on these smaller businesses.
About IFC
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
