Project detail - SEKERBANK T.A.S.

Who is our customer

Sekerbank is a rural and agri oriented high impact financial institution in Turkey and existing partner of FMO. Established in 1953 as sugar beet cooperative, Sekerbank is nowadays a bank with an extensive branch network in the Anatolian rural areas in Turkey and is still an important player in the Turkish agricultural supply chain. As the #14 bank in terms of assets, it has a relatively small market share, but Sekerbank is an important player in rural areas with a good and solid reputation under farmers and rural retail & SME clients. Sustainability is at the heart of the Bank’s operations, as is demonstrated by its focus on a.o. sustainable agriculture, energy efficiency and inclusive finance for women.

What is our funding objective?

FMO has provided a 3-year SME facility of 30 mln EUR to Sekerbank (15 mln EUR committed and 15 mln EUR uncommitted). This facility is earmarked for SMEs and contributes to FMO’s Reducing Inequalities target, as Sekerbank focuses on rural SMEs in Turkey, an underserved segment. In Middle Income country Turkey FMO has a strong impact focus, with almost all investments oriented towards the sustainability agenda and/or inclusive development. The business model of Sekerbank is focused on long-term relationships with SMEs in the agri supply chain in combination with a successful pioneering role in sustainability (as also illustrated by Sekerbanks’ successful Ekokredi product). This good strategic fit with FMOs impact agenda is also the reason of the cooperation of FMO and Sekerbank of more than 10 years.

Why do we fund this investment?

The agricultural sector is important in Turkey due to its contribution to GDP (7%), job creation (18% of total employment) and exporting opportunities, also for example in the southern provinces which are severely impacted by the inflow of Syrian refugees. With stimulating the rural areas Sekerbank and FMO also contribute to reducing the large regional income inequalities within Turkey. During the COVID 19 pandemic the agri sector has performed relatively well and provided an economic buffer against the more volatile tourism and services sector. It has been one of the factors that prevented Turkey from an economic recession in 2020/21. Finally, the facility has been provided during a volatile period. With the Turkish Lira depreciation of more than 40% during 2021 and increasing concerns about the inflation outlook and the potential consequences for access to financial markets, financial institutions are looking for long-term funding provided by long-term committed impact investors as FMO. In particular, during this challenging period, FMO financing acts as a stability anchor and is very additional to international commercial funding and the domestic short-term funding market.

What is the Environmental and Social categorization rationale?

Sekerbank is an existing client of FMO. The FI has been categorised as Category FI-A in accordance with FMO’s Sustainability Policy and EDFI Harmonized E&S Standards. The clients in the FI’s portfolio are active in sectors deemed to have potential, significant and adverse environmental and social risks and/or impacts, such as mining, agriculture, construction and energy among others. Sekerbank will be required to apply the EDFI Exclusion List, Turkey's E&S laws and regulations and the IFC Performance Standards (PS) Framework for the identified Triggered Transactions. Sekerbank has a functioning ESMS in place and has recently increased its E&S capacity. An ESAP has been developed to include the application of the IFC PS for the IFC PS Triggered Transactions through a E&S Tracking MIS. In addition, the FI is required to conducted an internal ESMS performance audit review (implementation of E&S processes and procedures).

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Date	Total FMO financing
12/29/2020	TRY 192.00 MLN
12/29/2020	EUR 20.00 MLN
12/29/2020	EUR 16.50 MLN