The European Bank for Reconstruction and Development (EBRD) said on Thursday that it has authorized a loan of approximately $11.4 million to Ulusal Factoring A.S. in Turkey.
The bank said small and micro enterprises generate up to 35.7 percent of Turkey's gross domestic product, but they do not have access to traditional financing from banks. As a result, less than 1 percent of these enterprises utilize factoring finance services.
“Factoring is an important alternative to traditional bank funding, especially for underserved small and micro companies where a lack of collateral often can represent a serious obstacle to growth," Noel Edison, EBRD director for insurance and financial services, said. "Overcoming this bottleneck can significantly boost growth, and the EBRD is pleased to support these efforts.”
Increasing support in factoring companies allows them to provide financing capital to small businesses that otherwise would not qualify for traditional financing from a bank.
“Funding from EBRD will provide support in our increasing focus on the micro and small enterprise segment," Ulusal Factoring's founder and CEO, Izak Koenka, said. "We are delighted that this will be an important step in building a long-term strategic relationship with EBRD.”