The International Finance Corporation (IFC) has entered into a groundbreaking collaboration with Yapı Kredi Bank, marking a pivotal alliance to bolster the growth of women-owned enterprises and promote sustainable climate finance in Turkey. By combining the global reach and expertise of IFC with Yapı Kredi Bank’s local insights, this partnership is poised to catalyze positive change, promoting economic resilience, gender equality, and environmentally responsible business practices in Turkey.
IFC will invest $125 million in Diversified Payment Rights (DPR) financing to Yapı ve Kredi Bankasi A.Ş. (Yapı Kredi) to support women-owned micro, small and medium-sized businesses and promote climate finance in Türkiye.
Türkiye's micro, small, and medium enterprises face a significant finance gap estimated to be $80.2 billion, which impacts business operations, economic growth, and job creation. Small businesses account for 73.5 percent of jobs in the country yet receive only 27 percent of bank loans. Women-owned smaller businesses, in particular, suffer from limited access to finance.
This investment will enable Yapı Kredi to increase access to finance for underserved small enterprises, with 25 percent of the proceeds committed to women-owned businesses. In addition, the bank will use its considerable expertise in sustainable finance to channel at least 35 percent of the proceeds to climate mitigation and adaptation SME projects, focusing on energy efficiency and renewable energy generation.
"As a financial institution, we act with the responsibility of accelerating the transition from high-carbon energy sources to low-carbon energy sources," said YKB's Yapı Kredi CEO Gökhan Erün. "With the latest financing agreement we have signed with IFC, we will contribute to projects focusing on energy efficiency and renewable energy production, as well as provide financing support to women-owned businesses."
One of the top 10 most energy-intensive countries in the Organization for Economic Co-operation and Development, the Turkish economy's average energy intensity has increased by 7.1 percent between 2015 and 2020. While Türkiye has committed itself to net zero emissions by ratifying the Paris Agreement in October 2021, energy-related emissions still account for 72 percent of the country's greenhouse gas emissions.
"IFC expects the private sector to provide half of the investments needed to help Türkiye achieve its ambitious climate commitments. Along with the important goal of furthering financial inclusion, this investment will help promote the growth of climate finance and encourage the adoption of climate finance standards and products in the Turkish market," said IFC's Wiebke Schloemer, IFC Director for Türkiye and Central Asia.
In September 2022, IFC provided a pioneering blue and green loan to Yapı Kredi's leasing subsidiary, Yapı Kredi Leasing. Fostering this important partnership with Yapı Kredi helps increase banks' adoption of climate finance standards, products, and practices while boosting inclusive economic growth and job creation in Türkiye.
IFC has supported private sector development in Türkiye for more than 50 years, with investments of nearly $11 billion in the last decade alone. Türkiye represents IFC's third-largest country exposure globally, with a committed portfolio of close to $5 billion as of September 2023.
About Yapı Kredi
Yapı Kredi has been sustainably strengthening its market positioning in the sector since its establishment in 1944 through a customer-centric approach and focus on innovation. Yapı Kredi achieved total assets worth TL 1.5 trillion as of the end of the first half of 2023. Constantly seeking to increase its contribution to the financing of the Turkish economy, Yapı Kredi enlarged the volume of its total cash and non-cash loans by 44% y-o-y in the first six months of 2023 to TL ~1.1 trillion. Yapı Kredi is rated B3 stable by Moody's and B- stable by Fitch. Koc Group owns 61.17% of Yapı Kredi and the remaining 38.83% of shares are publicly traded on Borsa Istanbul (BIST).