The Bank was founded as the “Sugar Beet Cooperative Bank” in 1953, pooling the modest savings of the sugar beet growers who belonged to the cooperatives. Currently, Sekerbank is a public company (approximately 30% free float on the Istanbul exchange) with the remainder owned 50/50 by the employee pension fund and Kazakhstan''s Turan Alem Securities JSC, a wholly owned subsidiary of Bank Turan Alem (BTA). The Bank has 214 branches in Turkey including rural areas in the central and eastern part of Turkey.

The current shareholder structure is Seker Bank Personnel Social Security Foundation (33.98%), Turan Alem Securities JSC (33.98%), beetroot cooperatives (2.01%) and the public (30.03%).

Turan Alem Securities JSC is owned by Bank Turan Alem (or “BTA”). BTA is the second largest bank in Kazakhstan in terms of assets and equity. BTA’s assets represent about 22% of the total assets of the Kazakh banking sector. Privatized and merged from 2 state-owned banks in 1998, BTA is now about 11% owned by a group of international financial institutions, including IFC, EBRD, FMO, and East Capital, an international equity fund, which has recently bought its stake from RZB. BTA issued issued the first RMBS in Kazakhstan in February 2007 with an amount of $153.6 million.

The total project cost is estimated at Euro 36 million. The proposed investment consists of:

- EUR18 million subordinated loan which would qualify as Tier II capital for 10 years (5 year grace) and
- EUR18 million senior loan for up to 7 years (2 year grace)

49.01 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	49.01
Equity

* These investment figures are indicative

Sekerbank is headquartered in Istanbul, Turkey and has 214 branches.

The developmental impact of Sekerbank’s down-scaling program is expected to be high and far reaching in terms of its economic support for productive micro enterprises, stimulus for employment generation and confidence building for the Turkish financial sector. Microfinance in Turkey is in its early stages and there is significant opportunity for portfolio growth in this underserved sector. In Turkey, there are about 3.2 million informal micro and small businesses operating in sectors that represent about 40% of the workforce and about 15% of the country’s GDP. This project is expected to reach an estimated 150,000 micro entrepreneurs during the tenor of the Financing Package through Sekerbank’s 214 branch office network located throughout Turkey.

IFC’s subordinated loan will strengthen the capital base of the Bank and enable the Bank to launch its microfinance lending program. Also, IFC’s A-loan will enable the Bank to fund its expansion in the growing SME sector of the Turkish economy through increasing its lending capacity.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the FI portfolio, and the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:

- The IFC FI and/or Microfinance Exclusion List(s) and/or
- The applicable National Social and Environmental Laws and regulations and/or
- The IFC Performance Standards

IFC will also review, if required, the capacity of the FI to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS.

Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC
- Identify responsible, qualified persons to manage and implement the SEMS
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements

- Submit a periodic report to IFC as per a format to be provided by IFC