Country Reoport

TURKEY
TGMP Breaks New Ground

A borrower of TGMP, Turkey, at her successful sewing business
The Turkish Grameen Microcredit Project (TGMP) is a "Build, Operate and Transfer (BOT)" initiative of Grameen Trust, which was officially launched in Diyarbakir, in south-eastern Turkey, in June, 2003. Since then, TGMP has successfully expanded to 14 different locations including Diyar bakir, Batman, Ankara, Mardin, Yozgat, Zonguldak, Eskishehir, Gaziantep, Chankiri, Afyon and Kars. It is funded by the Turkish Foundation for Waste Reduction (TFWR), the provincial governments and other agencies. Till December 2007, TGMP has reached 7,369 members and a total US$7,893,526 has been disbursed as loans. All the borrowers of TGMP are women and their repayment has been 100 percent in the 15 branches. Since its inception TGMP has created self employment opportunities for women and increased their income. Its members have become active participants in various decision-making processes at home and business. Access to microcredit has also generated greater awareness of the rights of women and children, along with the importance of education, family health care, etc. among the members. This has improved the overall socio-economic status of women and gradually empowered them within the society.

TGMP has received constant support and advice from Grameen Trust as well as Professor Aziz Akgul, CEO of TFWR. TGMP opened a branch in Ankara in October 2006. This branch is known as the Mamak Branch. The Mamak Branch initially started its operation with US$ 10,000 donated by HSBC Bank. From December 15, 2006, the Mamak Branch began financing its operation through commercial loans from HSBC Bank that charged 21% interest in local currency. The branch wishes to break-even by 2008, by lending to 700 borrowers and charging them a 30% effective interest rate on the loan. It is important to mention that this is the first time in history that a BOT project has received financing from the commercial banking sector. If Mamak Branch becomes successful with commercial financing, TGMP will further expand its operations throughout Turkey, by opening more branches.

Furthermore, the Mamak Branch has introduced on-line banking system (through Vodafon network) in order to keep track of individual loans and other information of the borrowers. With the `post machine', all information can be viewed and controlled from any point with necessary security codes and passwords. The Vodafon technology will also help the branches to function as independent units. This new technology has made the branches more cost-effective and time-efficient. Separate computer personnel are no longer required to put the information manually into the main database. This technology has made it possible for data to be directly updated into the main database, as soon as it is entered by any branch office. Currently eight branches of TGMP are using this new technology maintaining uptodate record of all members.

By utilizing commercial funds from HSBC Bank and on line banking system technology, TGMP has entered a new phase of development. If both these initiatives prove successful, this system can be adopted by the other Grameencredit BOT projects around the world.

Report by Shamsul Alam, Project Director, TGMP and Tasmina Rahman, Grameen Trust.