World Bank provides financing for quake-hit enterprises

WASHINGTON

A new World Bank project will help avert the closure and maintain employment in viable micro, small and medium enterprises (MSMEs) affected by the economic shocks of the earthquakes that hit southeastern Türkiye.

The $450 million project’s objective is to support business continuity and sustainable growth of viable MSMEs in the 11 earthquake-hit provinces.

Under the guarantee of the Treasury and Finance Ministry, the Small and Medium Enterprises Development Organization of Türkiye (KOSGEB) will implement the project with the aim to alleviate liquidity pressures on MSMEs and help them restore their operations and gradually restore employment to pre-earthquake levels by re-hiring workers or replacing those who have permanently left the affected regions.

“MSMEs have a significant contribution to the Turkish economy in terms of output, exports, and employment. Supporting the resilience of MSMEs to overcome the consequences of the earthquake will have positive spillover effects on the wider economy, through supply chains and supporting employment,” World Bank Country Director for Türkiye Humberto Lopez said.

“The Project will avert the closure of otherwise viable MSMEs due to damages to their productive assets because of the earthquakes, loss of workers, inputs, and generally lower demand. Consistent with this framework, the World Bank is pleased to contribute to the support of viable firms and the protection of vulnerable jobs in Türkiye,” Lopez added.

The project will provide reimbursable financing to eligible MSMEs to cover their operating expenses. Performance-based reimbursable financing will be disbursed through one application round on a “first come, first served” basis within a one-year period or until the funds are fully disbursed, whichever comes first.

To support more vulnerable groups, 10 percent of the total reimbursable financing funds will be earmarked for women-owned or led MSMEs.