We recently closed a USD mln 25 transaction with a 5-year tenor with our longstanding customer Odeabank, a privately owned foreign bank in Turkey. Via this transaction FMO supports local small and medium-sized enterprises (SMEs) in Turkey in the current challenging macroeconomic environment due to the impact of COVID 19 and market volatility. In addition, FMO supports the trade finance activities of Odeabank via a trade finance guarantee, aimed at supporting export opportunities of the SME clients of Odeabank. The Environmental and Social standards of Odeabank meet the standards of the international development banks. As part of the loan contract Odea will further broaden the application of international performance standards in their loan portfolio.
Odeabank is a niche player in the Turkish banking sector. The bank has been established in 2012 as a greenfield investment of Bank Audi Group and Odeabank is being boosted by support from IFIs where IFC and EBRD also became shareholders in 2016. Hence Odeabank is a relative newcomer in the competitive Turkish banking industry. Odeabank has grown rapidly in its first years of existence, and in recent years consolidated its market position via its focus on digital, client focused and innovative services in particular for medium sized companies. With this new facility, Odeabank is well prepared to increase its SME portfolio in the coming years and at the same time improves its Asset Liability profile via the long-term funding received from FMO.
Turkey needs more export revenues to reduce its structural current account deficit. In addition, the local export-oriented SMEs are important to create job opportunities. In Turkey, the SME sector represents approximately 75% of total employment. Exporting SMEs are the backbone of the Turkish economy and can benefit from the improved competitiveness due to the Turkish lira (TRY) weakness and the global supply chain opportunities due to the COVID pandemic. The transaction fits in FMOs strategy to support the private sector in Turkey with long-term financing contributing to local sustainable economic development.