A Turkish private lender and the U.S. government's development finance institution on Friday announced they had signed a $100 million loan agreement aimed at supporting Türkiye’s earthquake region.
The seven-year loan deal between Şekerbank and U.S. International Development Finance Corporation (DFC) will be used primarily to support the development of the southeastern provinces devastated by the earthquakes in early February.
The agreement will cover financing for women's businesses and small and medium-sized enterprises (SMEs), the statement said. It will seek to expand financial inclusion and increase social impact.
The quakes on Feb. 6 claimed over 50,000 lives, toppled hundreds of thousands of buildings, left millions homeless and severely damaged the southeastern region's infrastructure.
Business groups, economists and the government have said rebuilding could cost more than $100 billion.
Addressing a press conference to announce the deal in Istanbul, Hasan Basri Göktan, Şekerbank chairperson, said the lender will also allocate $33 million from its own resources to increase the total loan amount to $133 million.
As part of the deal, Şekerbank aims to support approximately 350,000 SMEs, 80% of which are micro and small enterprises, and 1.5 million existing and new employment opportunities over the next seven years, Göktan noted.
The Turkish government has promised to rebuild over 600,000 homes for people left homeless by the quakes, including 319,000 to be delivered in a year.
The agreement on Friday follows $235 million in U.S. government support and over $110 million in U.S. corporate donations to the earthquake zone in the aftermath of the disaster.
"This loan is a tremendous step toward supporting the earthquake-affected communities in Türkiye. We are honored to play a part in our Turkish friends’ recovery and rebuilding process," U.S. Ambassador Jake Flake told the press conference.
Underlining the truly remarkable potential impact on numerous lives, Flake emphasized that witnessing significant progress merely a few months after the earthquake deeply resonated with them. He underscored the necessity of credit or financial support for sustained advancement, noting that the majority of these loans would be below $2,000. This capacity could extend funding to approximately 100,000 individuals, directly influencing the lives of roughly 1.5 million people – an aspect of immense significance.
Recognizing that Türkiye has extended aid to more than 50 countries across five continents in the past seven years, the ambassador expressed that providing assistance to Türkiye during times of need brings them immense pleasure and honor.
Agnes Dasewicz, DFC chief operating officer, said her institution was proud to support Şekerbank in providing financing for the small businesses that provide jobs and essential services critical to the enduring recovery of communities affected by the earthquakes.
"DFC’s commitment to bolster Şekerbank’s ability to provide financing for women-owned businesses will also help to ensure that as these communities rebuild, their economies grow stronger and more inclusive for the long term," Dasewicz said.
Göktan thanked the DFC representatives and expressed his gratitude for the support of the representatives of the U.S. mission to Türkiye.
He highlighted Şekerbank’s experience in this field and its role in the financing of micro and small enterprises, along with its widespread branch network throughout Türkiye and mainly in rural areas, which he said had played a key role in the DFC's decision to offer the loan.
"The loan will be extended with maximum financial inclusion. During the seven-year term, we target providing financing to approximately 350,000 SMEs, 80% of which are micro and small enterprises," he noted.
He also stressed the social impacts of the project, which is aimed at providing welfare and employment to hundreds of thousands of people living in the region.
"With the DFC loan, we aim to support approximately 1.5 million existing and new employment opportunities in the earthquake-affected zone in the next seven years," he noted.
Göktan emphasized the significance of the long-term flow of external resources to ensure the resumption of production in the quake zone, adding that such resources can mobilize the banking industry’s growth capacity and provide full development in the region.