The FINANCIAL — TBLISI, GEORGIA. The Asian Development Bank (ADB) is providing an aggregate of $130 million in loans and $1.05 million in technical assistance grants to three financial institutions to support micro, small and medium-sized enterprises (MSME) and farmers, helping them to raise income levels and employment.
TBC Bank will receive senior and subordinated loans of $100 million, Credo Microfinance Organization a $23 million senior loan, and Finca Bank Georgia a senior loan of $7 million. ADB’s loans range from 4 to 6.5 years, and will allow the borrowing institutions to provide long term funds to clients. The loans may be denominated in lari to help boost local currency use and mitigate MSME exposure to foreign exchange risks, according to ADB.
“Our assistance to Credo, FINCA Bank Georgia, and TBC Bank will expand banking services for small businesses and farming households and improve delivery of financial services to underserved regions, boosting economic activities that are critical to Georgia’s sustainable and inclusive growth,” said Rainer Hartel, Principal Investment Specialist in ADB’s Private Sector Operations Department. “We are proud to work with TBC Bank in expanding the TBC Academy services to MSMEs, helping Credo to expand services to MSMEs, and supporting Finca Bank in going the extra mile to serve remote villages.”
Around 43% of Georgians live in rural areas and 27% in regional towns with a vast number working in small enterprises or in subsistence farming. The assistance will help address low levels of productivity, employment, and incomes that result in high poverty in the regions.
The ADB assistance for TBC will help it grow its MSME lending, while the assistance for Credo will help it broaden its lending to small business. Support for Finca Bank Georgia will finance efficiency improvements and branchless banking services for clients in remote areas.
“ADB will continue its strong support for financial market and economic development in Georgia,” said Yesim Elhan-Kayalar, ADB Country Director for Georgia.
Since 2007, ADB has provided nonsovereign loans of $125 million to banks in Georgia, including TBC, in support of MSMEs.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.