Announcement of Turkey Expands Agricultural Credit System on June 19, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/94 Contact: Fawzi Rihane (202) 473-2675 TURKEY EXPANDS AGRICULTURAL CREDIT SYSTEM WASHINGTON, June 19, 1989 -- Turkey's efforts to improve its farm-credit system will be strengthened through a project supported by a World Bank loan of $250 million. The project will help the Agricultural Bank of Turkey (TCZB), the country's largest bank and main financial intermediary for agriculture, to become more efficient and financially self-sustaining. The project will reinforce TCZB's institutional-development program and expand its capacity to provide credit to farmers more efficiently. It will also strengthen the credit operations of the Agricultural Credit Cooperatives (TKK), which specialize in providing credit to small- and medium-scale farmers. The project, expected to generate agricultural growth and increase the incomes of about 210,000 farmers in 45 provinces through increased access to credits, is the third World Bank-assisted operation to strengthen TCZB's lending operations. It will be carried out over three years at a total cost of more than $1.2 billion. TCZB, TKK and participating farmers will contribute to the project financing. Over the past two decades, Turkey's agricultural policies have shifted from an inward-looking orientation to a strategy that is more export-oriented. While the relative importance of the agricultural sector in the economy has been declining, it still accounts for about 15 percent of the gross domestic product, 20 percent of export earnings and almost 60 percent of civilian employment. The sector will continue to play a significant role in meeting domestic food demand, supplying industrial raw materials, providing foreign-exchange earnings and generating employment. The World Bank loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.