GREATER ANATOLIA GUARANTEE FACILITY

Presentation by the European Investment Bank Group18 May 2011, Ankara

This project is co-financed by the European Union and

the Republic of Turkey

11 April 2011

Agenda

1. Background, Structure and Targets

2. Implementation: Q1 Results and Current Status

11 April 2011

Agenda

1. Background, Structure and Targets

2. Implementation: Q1 Results and Current Status

11 April 2011

Problem statement: disparity in regional development and access to finance of SMEs

• 25% of SMEs in the country• Representing 22% of employment generated by SMEs• Receiving only 10% of SME lending

NUTS II Regions having an income per capita above the 75% of Turkish national average

15 Growth Centres

NUTS II Regions having an income per capita below the 75% of Turkish national average

11 April 2011

GAGF as a means of addressing the problem

MIC

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€5m

GREATER ANATOLIA GUARANTEE FACILITY

SME C

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€25m

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N€2m

EIB Greater Anatolia SME Loan Programme€250m

• A holistic programme designed for credit enhancement for SMEs and microenterprises in the Target Region

– Micro-credit guarantees: through counter-guarantee provided to KGF

– SME loan guarantees: through portfolio guarantees provided to five banks effectively linked to EIB lending

– Capacity building for key actors in implementation

11 April 2011

Pillar 1: Micro-Credit Guarantees

TargetEUR 37.5m / TRY 74.6m Credit Volume

1,500 Micro-enterprise

EIF KGFAll banks

in the Target Region

Counter-guarantee Guarantee

Micro-enterprise

...............

...............

Micro-enterprise

Micro-enterprise

Micro-enterprise

11 April 2011

Pillar 2: SME Loan Guarantees

Target

2,500 SMEs

EIFGuarantee

SME

SME

SME

SME

............... ...............

Akbank

Denizbank

Halkbank

Yapı Kredi

Vakıfbank

EIBLoan

EUR 250 millionEIB Loan + EUR 250 million

Banks’ Resources = EUR 500 millionCredit Volume

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Pillar 3: Capacity Building & Promotion

• Capacity building designed for key implementing partners to ensure effectiveness and sustainability– KGF, five banks and DGIT as end-recipient

• Promotion designed for increasing SMEs awareness of the Facility and visibility of stakeholders– EU, CFCU, MoIT, EIB Group, KGF, five banks

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Major Milestones

Official Launch of the Facility 16 July 2010

Signature of Agreements 22 October 2010

Completion of Internal Procedures by FIs June 2011

Kick-Start Promotion of the Facility

KGF Needs Assessment Results

June 2011

September 2011

11 April 2011

Agenda

1. Background, Structure and Targets

2. Implementation: Q1 Results and Current Status

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2011 Q1 Results

• Total Volume: TRY 102.2 million (~ EUR 46.5

million)

• Total Number of Loans: 1022

• Total Number of SMEs: 978

11 April 2011

Volume – Regional Breakdown

TR-907%

TR-A24%

TR-C310%

TR-C210%

TR-C18%

TR-B23%

TR-B18%

TR-A13%

TR-8317%

TR-826%

TR-711%

TR-6313%

TR-A1 Erzurum, Erzincan, Bayburt

TR-A2 Agri, Kars, Igdir, Ardahan

TR-B1 Malatya, Elazig, Bingol, Tunceli

TR-B2 Van, Mus, Bitlis, Hakkari

TR-C1 Gaziantep, Adiyaman, Kilis

TR-C2 Sanliurfa, Diyarbakir

TR-C3 Mardin, Batman, Sirnak, Siirt

TR-63 Hatay, Kahramanmaras, Osmaniye

TR-72 Kayseri, Sivas, Yozgat

TR-82 Kastamonu, Cankiri, Sinop

TR-83 Samsun, Tokat, Corum, Amasya

TR-90 Trabzon, Ordu, Giresun, Rize,Artvin, Gumushane

Credit Volume / Kredi Hacmi(TRY 102 million / EUR 46.5 million)

11 April 2011

Number of Loans – Regional Breakdown

Number of Loans / Kredi Sayısı(1088)

TR-90 9%

TR-A1 4%

TR-A2 5%

TR-C1 9%

TR-B2 2%

TR-B1 6%

TR-C2 6%

TR-C3 8%

TR-63 13%

TR-7212%

TR-82 5%

TR-8321%

TR-A1 Erzurum, Erzincan, Bayburt

TR-A2 Agri, Kars, Igdir, Ardahan

TR-B1 Malatya, Elazig, Bingol, Tunceli

TR-B2 Van, Mus, Bitlis, Hakkari

TR-C1 Gaziantep, Adiyaman, Kilis

TR-C2 Sanliurfa, Diyarbakir

TR-C3 Mardin, Batman, Sirnak, Siirt

TR-63 Hatay, Kahramanmaras, Osmaniye

TR-72 Kayseri, Sivas, Yozgat

TR-82 Kastamonu, Cankiri, Sinop

TR-83 Samsun, Tokat, Corum, Amasya

TR-90 Trabzon, Ordu, Giresun, Rize, Artvin,Gumushane

11 April 2011

Number of SMEs – Regional Breakdown

Number of SMEs / KOBI Sayısı(1044)

TR-90 9%

TR-A13%

TR-A2 5%

TR-B1 6%

TR-B2 2%

TR-C1 9%

TR-C2 6%

TR-C3 8%

TR-63 14%

TR-72 12%

TR-82 5%

TR-83 21%

TR-A1 Erzurum, Erzincan, Bayburt

TR-A2 Agri, Kars, Igdir, Ardahan

TR-B1 Malatya, Elazig, Bingol, Tunceli

TR-B2 Van, Mus, Bitlis, Hakkari

TR-C1 Gaziantep, Adiyaman, Kilis

TR-C2 Sanliurfa, Diyarbakir

TR-C3 Mardin, Batman, Sirnak, Siirt

TR-63 Hatay, Kahramanmaras, Osmaniye

TR-72 Kayseri, Sivas, Yozgat

TR-82 Kastamonu, Cankiri, Sinop

TR-83 Samsun, Tokat, Corum, Amasya

TR-90 Trabzon, Ordu, Giresun, Rize, Artvin,Gumushane

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Current Status (as of 12 May)

• Total Volume: TRY 177.5 million (~ EUR 80.7 million)

• Total Number of Loans: 1875• Main value-added concentrated on

reduced collateral and interest rate

11 April 2011

Promotion

• Recruitment of a PR agency being completed• Presentation to Gaziantep and Samsun

Chambers of Commerce in April with participation of RDAs and other SME networks– GAGF is well-received and cooperation is ensured

• Presentation to SMEs to take place in second half of June in Gaziantep, Samsun and Kayseri (tbc)

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Take Aways

• Only 5 months into implementation• Pillar 2 = Star of the Facility• Results are visible High Expectations• Pillar 1 & 3 less visible, but as important• Reconvene in 12 months time

11 April 2011

Questions?

Contacts:

Jose RomanoEIFHead of Turkey & iVCij.romano@eif.org

Thank you

Özlem ÇotukEIFProject Managero.cotuk@eif.org

11 April 2011

Back-up slides

11 April 2011

Sponsors and Partners of the Facility

• European Union and Republic of Turkey co-financing EUR 32m of funds (IPA+National Contribution)

• European Investment Bankproviding EUR 250m lending andlong-standing relationship with Turkish banks

• European Investment Fundmanaging the Facility andbringing expertise on risk-sharing

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Terms for the Micro-Credits

Max. Loan Amount EUR 25,000 / up to TRY 50,000

Min. Loan Maturity 6 months

Max. Loan Maturity 3 years

Currency TRY

Loan Type Investment or working capital

Beneficiaries Micro-enterprises (EU definition*) established or having majority operations in the Target Region

*Having less than 10 employees and annual turnover/total assets < EUR 2m

11 April 2011

Terms for the SME Loan

Max. Loan Amount EUR 500,000 / up to TRY 1,000,000

Min. Loan Maturity 2 years

Max. Loan Maturity 5 years

Currency TRY or EUR

Loan Type Investment or working capital

Beneficiaries SMEs (EU definition*) established or having majority operations in the Target Region

*Having less than 250 employees and annual turnover < EUR 50m or / total assets < EUR 43m