The Greater Anatolia Guarantee Facility
Although a quarter of the country’s small and medium-sized businesses are based in the country’s 43 least-developed provinces, this dynamic segment of the economy was only receiving 10% of bank lending. Easing the supply of credit to SMEs and micro-enterprises was crucial to enabling the sector, particularly manufacturing, to acquire new technology and implement modern business administration and management skills. Insufficient capital was also the fundamental bottleneck for start-ups.
The aims of the project and its core activities
The aim of this project, the Greater Anatolia Guarantee Facility (GAGF), was to facilitate better access to finance of small and medium-sized businesses in Turkey’s 43 least developed regions – from Kastamonu and Samsun on the Black Sea, to Kayseri and Kahramanmaraş in the centre and Kars and Van in the east. This goal was achieved through a combination of €450 million of lending by the European Investment Bank (EIB) and €51 million in portfolio guarantees by the EU and Turkey.
The GAGF comprised three main pillars: The first pillar was a counter-guarantee agreement for €5 million with the Kredi Garanti Fonu (KGF), which aimed to reach around 1,500 micro-enterprises in the target region through partner banks.
The second, with a commitment of €44 million, was a direct guarantee provided to five partner banks, namely Akbank, Denizbank, Halkbank, Vakıfbank and Yapı Kredi, which aimed to generate an overall, new SME portfolio of €900 million in the target region.
The third pillar comprised €2 million earmarked for capacity building and promotion of the facility.