World Bank backs Turkish youth and women with SME funding
- $878m to support 30,000 SMEs
- Easier loan access for women and youth
- Performance-based incentives
The World Bank is to fund a new scheme to promote employment and economic empowerment for Turkish small enterprises, with an emphasis on loans to women and youth.
The institution will work with local bank Türkiye Vakıflar Bankası to leverage a €750 million ($878 million) funding guarantee to support micro, small and medium-size enterprises (MSMEs) and to mobilise up to €1.5 billion in commercial financing from international lenders.
The focus of the scheme, part of the bank’s Access to Finance for Jobs and Growth Programme, will support women and younger Turkish entrepreneurs in the MSME sphere, who the bank says have traditionally struggled to access funding.
As part of the programme, the funding guarantee provides loans to around 30,000 MSMEs, including 15,000 women-led and 1,000 youth-led companies, in particular in underdeveloped regions of Turkey or those impacted by natural disasters.
The scheme will also offer performance-based incentives for companies hiring and retaining workers, especially women and youth, and adopting digital financial services to increase access to lending.
According to World Bank projections, the scheme is expected directly or indirectly to create up to 800,000 new or improved employment opportunities.
The scheme aims to have a wider impact on the Turkish economy and smaller business ecosystem, according to Etkin Özen, World Bank task team leader.
“Beyond financing, this project aims to be a demonstration platform that brings financial sector actors to harmonise definitions, verification practices, and reporting standards for MSMEs, enabling other banks to replicate and scale financial services for MSMEs, especially women-led enterprises,” he said at the unveiling of the programme in Washington.
It is vital for the country’s economy to bring women from their home and into production, said Mehlika Gider, president of KAISDER, the Women Employers and Industrialists Association.
“Business has no gender but as women you are disadvantaged from the start due to social codes,” she told AGBI. “So positive discrimination is needed for women.”
Further reading:
- Turkey aims to spread industry to deprived regions
- Turkey’s new strategy targets skilled jobs for youth
- More layoffs likely in embattled Turkish clothing sector
What will be important in the new programme are the terms under which the loans are given, said Gider, with any support needing to be sustainable under the current economic climate.
The new scheme is just the latest programme backed by the World Bank in Turkey.
In November, the international lender announced it had struck a $640 million financing agreement to fund projects to bolster Istanbul’s emergency preparedness capacity and reinforce urban infrastructure against natural disasters.
The bank is also in talks with the government over facilitating $6 billion in funding to support work to upgrade the national energy transmission grid, while recently providing a further $600 million to fund flood and drought mitigation projects.
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