By Olga Rosca
The European Bank for Reconstruction and Development (EBRD) is developing new financing tools to support Turkish businesses as the coronavirus pandemic continues to impact the country’s economy. The Bank is preparing to deploy supply-chain finance to both large companies and small and medium-sized enterprises (SMEs).
Addressing chief financial officers of Turkey’s top companies at the CFO Summit 2020, EBRD Managing Director for Turkey Arvid Tuerkner said: “Due to the pandemic, supply chains are once again under pressure. Supply-chain finance can provide lower financing costs and improve business efficiency for buyers and sellers alike. For large firms, it is an opportunity to build more sustainable and resilient supply chains, and for SMEs it is a way to access affordable, stable and recurrent financing.”
Supply-chain finance took off after the 2008-09 financial crisis and is prized by companies for its financial flexibility. The cash-management arrangement benefits both suppliers and buyers; suppliers are paid early and buyers can extend their payment terms.
The EBRD is planning to join forces with other financial institutions to provide higher amounts of financing.
In addition, consultancy services will be available to firms to improve their digital capacity to participate in the technology-based financing tool. The advice will be funded by grants provided by the Ministry of Treasury and Finance of Turkey and the TaiwanBusiness-EBRD Technical Cooperation Fund.
Deploying supply-chain finance to Turkish companies is part of the EBRD’s work to help the private sector, in the 38 economies where the Bank invests, to overcome the impact of the coronavirus pandemic and support the recovery.
The EBRD is a major investor in Turkey and so far this year has provided €1.5 billion in financing for the economy. To date, the Bank has invested €12.4 billion in the country through more than 300 projects, with almost all investment in the private sector.