Social Capital

Financing of SMEs

SMEs are recognized for a variety of important characteristics, such as expanding production and product diversity, creating employment with low investment costs, adapting quickly to changes in demand and diversity, openness to technological innovations, balancing interregional development, minimizing inequalities in income distribution, encouraging individual savings, and complementing and supporting large industrial enterprises. In addition to these qualities, SMEs are among the Bank’s priorities for support, as they provide an element of political and social stability and are a fundamental component of a democratic and liberal economy.

Support for Women’s Employment

The Bank acts in line with the principles of equal opportunity and non-discrimination and pays particular attention to women’s employment in its employment creation initiatives. While stating that sustainable development can be achieved by including more women in the labor market, the Bank pays attention to the balance between men and women among employees and emphasizes the importance of women’s employment through its activities. The Formal Employment Creation Project and Emergency Company Support Loans provided by the World Bank adopt an approach that prioritizes women-inclusive SMEs.

Development Cooperation Programs with Public Institutions and the World Bank

The Bank adopts an approach that prioritizes Stakeholder Capitalism and Collaboration. Working with public institutions in the context of development partnerships, the Bank plays an active role in grant programs such as COMCEC (Standing Committee for Economic and Commercial Cooperation of the Organization of Islamic Cooperation) and European Union programs. In this process, it also provides project management and consultancy services to organizations in its efforts to ensure the effective participation of all stakeholders. Stakeholder capitalism, collaboration, and the integration of development-oriented approaches are the cornerstones of the Bank’s strategy to support sustainable growth both locally and internationally.

COMCEC Project Finance Grant Programs

COMCEC Project Finance is a funding system determined by the COMCEC Coordination Office (CCO) and activated in 2013. Through this system, projects from the member countries and relevant Organization of Islamic Cooperation (OIC) organizations are financially supported while aiming to achieve the objectives and results of the COMCEC Strategy. The COMCEC Project Financing aims to promote solidarity among the member countries, to ensure multiple cooperation, and to develop the human and institutional capacities of the member countries, taking into account the policy recommendations approved by the COMCEC Ministerial Meeting.

The OIC affiliated organizations and governmental institutions of the COMCEC Member Countries may submit project applications to the relevant Working Group working in the field of economic and trade cooperation. The projects can be designed in one of the six different areas of cooperation (Financial Cooperation, Agriculture, Trade, Tourism, Transport and Communication, and Poverty Alleviation), taking into account the sectoral themes approved by the CCO and published on its website. In addition to the host country, at least two partner countries are involved in the project, either as beneficiaries or capacity providers (technical assistance, human resources, etc.).

In the project carried out under the agreement signed between the COMCEC Coordination Office and the Bank, out of the total 24 projects planned to be financed in the implementation year 2022, two projects were canceled, and 16 projects were completed. The financial reporting and disbursement process of six projects are still ongoing. As of 30.12.2022, 15,540,818.02 TL has been received in 2022 under COMCEC, and 12,643,154.38 TL of this amount has been reserved for project payments. For the 2023 implementation year, the project list has not been announced yet.

World Bank FRIT-II Funded Formal Employment Creation Grant Program

The Formal Employment Creation Project is an initiative that aims to improve access to the labor market and the employability of Turkish citizens and refugees. The project is implemented in cooperation with TKYB and the World Bank as it aims to expand the social and economic autonomy of the relevant groups, reduce their dependency on social assistance programs and increase their contribution to the Turkish economy.

As part of the project, it aims to strengthen the expansion capabilities of businesses serving specific regions. In this framework, it is planned to support access to financial and skills resources for Turkish citizens and refugees to increase their access to formal employment opportunities and decent working conditions.

Within the scope of this project with the World Bank, TKYB launched a call for proposals for the 70 million € Kayist Grant Scheme on 17 December 2021.

The 24 potential grantees were given until March 14, 2022, to submit sub-grant project proposals based on viable business and employment plans. The Bank’s Development Cooperation and Wholesale Banking Unit carried out these activities using a project cycle management approach, prepared the Project Implementation Manual approved by the World Bank, and completed the planning and call for proposals processes of the Kayist Grant Program.

After the project evaluation was completed, a list was prepared for the World Bank’s initial approval. This list includes the prime and substitute candidates. Once the environmental and social assessments are completed by the consultant firm and the World Bank’s second approval is obtained, grant contracts will be signed with the companies on the list. These contracts are expected to be completed in the first quarter of 2023 and the program is expected to end in the last quarter of 2024.

Having completed the pre-assessment, independent evaluation, evaluation committee, budget revision, and environmental and social assessment stages, the Grant Platform envisages that the final stage, the contracting and monitoring module, will be completed in the second quarter of 2023. For the grant component of the project with the World Bank, the contracts to be signed with the beneficiaries are planned to be finalized in the first quarter of 2023. After the first monitoring visit, advance payments to grant beneficiaries will be initiated.

Within the framework of the Grant Program to be implemented between 2022 and 2024, some of the Bank’s institutional capacity-building activities and technical assistance training for grant recipients are envisaged to take place in 2023.

Project documents include a Stakeholder Engagement Plan, a Workforce Management Plan, an Environmental and Social Commitment Plan, the Bank’s Environmental and Social Policy, a Grievance Mechanism, a Project Implementation Manual, a Grant Program Application and Evaluation Package, and a Grant Application Evaluation Manual. In addition, the extension process for the VAT Exemption Certificate obtained under the Technical Assistance Component of the Project was initiated.