Turkey to extend new $4.3 billion loan package to companies: TRT By Reuters

© Reuters. Turkey to extend new $4.3 billion loan package to companies: TRT

ISTANBUL (Reuters) – Twelve Turkish banks will offer companies a total of 25 billion lira ($4.31 billion) as part of a Treasury-backed loan package, state broadcaster TRT Haber said on Wednesday, in what would be Ankara’s latest effort to boost lending and the economy.

Each company would be able to use between 5 and 50 million lira depending on its revenue, it said, adding that 36-month loans will have an interest rate of CPI+4 and 48-month loans will have a rate of CPI+4.5.

All loans will have a six-month grace period for the principal amount and the interest rate will be revised every six months according to the consumer price index (CPI) level, TRT Haber said. The loans will be backed by the government’s Credit Guarantee Fund, it added.

The Treasury spokesman did not immediately comment.

The package would mark the latest step that Ankara has taken to spur lending to liven up the economy, after a currency crisis saw the lira lose nearly 30% of its value last year, driving the economy into recession.

The crisis raised the cost of servicing foreign debt for companies who had for years been flourishing on cheap credit, leading to a build up of bad loans in banks.

Finance Minister Berat Albayrak announced in April that Ankara would provide a $4.9 billion to state banks to support their balance sheets. He announced another package in May that would provide banks another $4.9 billion to help bail out some exporting sectors.

Ziraat Bank, Is Bank, Halkbank, Garanti Bank, Yapi Kredi Bank, Vakifbank, Akbank, QNB Finansbank, Denizbank, TEB, Sekerbank and Eximbank will participate in the new loan package, TRT said.

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