The funding is intended to bolster climate-positive lease financing for Turkey’s SME sector, the backbone of the country’s economy and provider of 70% of national employment.
Swiss-based asset manager responsAbility has invested a total of €27.5m in Turkey’s Denizleasing through funds under both its financial inclusion and climate finance strategies, to support climate-positive SME lending and leasing.
Denizleasing is one of Turkey’s largest private leasing companies, and is part of the DenizBank Group, a financial services group owned by Dubai’s Emirates NBD.
The investment is intended to allow Denizleasing to build on its key role in enabling SMEs in Turkey to access finance by strengthening its capacity to provide flexible, asset-based leasing solutions to meet SMEs’ needs, supporting business growth and fostering innovation, according to responsAbility. Turkey’s SME sector is critical to the economy, accounting for some 70% of employment in the country. The asset manager pointed out that SMEs consistently make up approximately 99% of all registered firms in the country.
“Leasing is an important part of the Turkish financial ecosystem because it provides SMEs – who make up critical part of the economy – with affordable access to modern equipment and technology they couldn’t otherwise finance through traditional banking loans. This makes the sector especially relevant for channelling climate finance into areas such as rooftop solar, energy-efficient machinery, and green construction equipment,” a spokesperson told Impact Investor.
Part of the funding is being directed to green leasing solutions, such as small- to mid-scale solar photovoltaic systems and energy efficiency technologies in sectors such as light manufacturing and construction.
The asset manager said it would also provide technical assistance to help Denizleasing bolster its environmental and social management systems and develop green products to widen its range of climate offerings.
The investment builds on an existing partnership between responsAbility and the DenizBank Group. In March, responsAbility provided a $25m long-term senior debt facility to the Group to help DenizBank’s to provide finance to its SME and corporate borrowers, also to promote energy efficiency technologies and renewable energy investments.
According to responsAbility, expanding the partnership to the group’s leasing subsidiary reflected strong potential for the DenizBank Group to channel both SME and climate finance into fast-growing market sectors in Turkey.
The International Finance Corporation has also provided financial support for Denizleasing recently, announcing a $75m (€64.1m) loan agreement with the company in June to fund climate financing for renewable energy, energy efficiency, and blue finance aimed at protecting underwater environments, as well as SMEs supporting gender inclusion.
Meanwhile, responsAbility was also part of an investor group led by Dutch development bank FMO that said in August it was providing a €130m syndicated loan facility for another Turkish leasing company, QNB Leasing. That financing was also in support of clean energy projects, plus small firms focusing on women, youth, and rural development.
“For DFIs and impact investors, Turkish leasing is attractive not only because of its growth potential compared to other markets, but also because of its development and climate impact. It effectively bridges the financing gap between SMEs’ capital needs and the country’s broader climate finance objectives,” said the spokesperson.
