The FINANCIAL — The number of Bank Constanta clients grew significantly this year, by 23%, reaching 28,000 clients as of May 31, 2011.
The Bank has also grown financially, disbursing 52 million GEL for developing the micro financial sector, which is 70% greater than the same period of the last year.
By May 31, the portfolio of agricultural loans issued by Bank Constanta increased by 83% in 2011 and its share reached 32% of the total portfolio from 25% last year.
International money transfers at Bank Constanta by April 30 have tripled for both incoming and outgoing transfers too compared to the same period of the last year.
As Levan Lebanidze, General Director of Bank Constanta told The FINANCIAL, “the Bank is taking a stronghold of the Georgian financial market by adjoining TBC Bank as its 80% shareholder.”
Q. In how many locations are Bank Constanta branches present, and what of your expansion plans?
A. We are always trying to expand our branches and reach all areas where there is demand for micro loans, as the latter is our main direction at Bank Constanta.
Currently the Bank has 21 branches, out of which 6 are in Tbilisi and the rest in other regions throughout Georgia. According to our strategic direction (micro-loans), we’ll be opening new branches in the regions of Georgia.
There is definitely demand for micro-loans in Georgia and this line is booming in Georgia although banks and other institutions still can’t satisfy the growing demand in certain locations. That’s the niche that we want to fill.
Q. What about banking products, what are you offering as a new service to your customers?
A. We’re working on various new products as well as revamping the older ones at our bank. As our main focus is micro-credits we want to be a prime solution for businesses which are in need of money.
In a month’s time we’ll have plastic cards for our clients which will be of high quality and with much functionality. There are already many ATM stations, in each of our branches, where any bank cardholder can take out money. Hence through Bank Constanta plastic cards people can take out money with minimal effort at their desired location.
In addition we have introduced pawnshops in each branch of our bank.
Q. What has changed since merging with TBC Bank, as the latter became 80% owner of Bank Constanta’s shares (a controlling stake)?
A. Bank Constanta got a very reliable and strong partner – TBC Bank, which strengthened our position on the Georgian microfinance market and supported the Bank’s rapid growth. Bank Constanta is continuing to work in the microfinance sector with increased ambitions and plans.
Our financial capabilities have grown drastically as well as having other technical support from TBC Bank. It gives us the ambition to better serve people willing to take out micro-credits.
TBC Bank is 80% shareholder at Bank Constanta, OikoCredit has 13% of the shares whilst 7% is owned by individual persons.
Q. What is the share of Agro-Loans and the share of other spheres’ activities at Bank Constanta?
A. The agricultural sector is very important for us and we regularly increase crediting to this segment as we are seeing rising demand from the customers. Consequently, by May 31 the portfolio of agricultural loans had increased by 83% from last year with its share reaching 32% of the total portfolio (from 25%).
As for portfolio distribution in terms of other sectors, trading holds almost 50% of the total portfolio, followed by the agricultural sector, services and production.
Q. What criterions should a small company satisfy to get loans from the Bank and do you finance start-ups?
A. Generally we don’t finance start-ups. Although if a business has a 3-6 month track record which shows that it’s a perspective business in Georgia then of course we finance them.
Moreover at later stages we evaluate the business operations, functions and management. The main thing is to ensure from the borrowers side to show that there is demand for the product or service he/she is going to offer.
Q. What about the pawnshops which you’ve recently introduced?
A. Pawnshops have been in great demand among our customers, which was why we decided to introduce such a service in each of our bank branches.
When Constanta was a micro-finance organization, we also had such a service although for a small period of time and now we’re fully committed to developing this line of banking products as well.
Q. What about the new regulations introduced by National Bank of Georgia vis-à-vis commercial banks, how will that affect your activities?
A. This is a very important step/regulation implemented by National Bank of Georgia. It necessitates each bank giving all the necessary information to its customers before lending a loan.
Information about loan conditions/pay etc was previously delivered in different formats/ways to customers, whereas now each bank is required to have the same format about informing customers on every possible risk entailed. In the latter case the client is aware of any possible bottle-necks that might arise throughout its loan or deposit duration.
Q. What about locations in the country where there hasn’t been any significant banking experience and people don’t have enough skills and education to take out a loan?
A. It’s really an issue which our bank is trying to resolve through “consuls” – a person who is an authority in the typical region and informs the dwellers about banking products thereby increasing local awareness about it. Then those people who have been informed can come to our nearest branches to take out loans etc.
This is really important for village inhabitants as they sometimes find themselves isolated from banks with no means of interaction with them.
Q. What about the amount of loan which can be taken out at Bank Constanta, has the existing margin been extended yet?
A. The minimum amount of a loan is 60 USD going up to 200,000 USD, the length of the loan varies from 3 months up to 5 years. As for the margin itself, it hasn’t extended although if we have a long term relationship with the client then we can give an additional amount of money to him/her.
Moreover, there are easier terms on loans – up to 2,000 GEL for small enterprises.
Q. How about IFC’s (Int. Financial Corporation) risk management programme in which Constanta has been participating?
A. The project has not finished yet, although it’s been very important for us. Risk management is a strategic direction at our bank and we have quite long experience vis-à-vis the issue, which is one of the main reasons why we’re successful.
Q. How have your customers increased from 2010 to 2011?
A. The number of Bank Constanta customers in 2010 increased by 92% and reached about 23,000 clients at the end of the year, including borrowers as well as other banking service customers. As for the recent year, we already reported 23% growth by May 31, 2011 with an increasing growth rate, and the number of our customers reached 28,000 clients at this period.
Q. What about international/local money transfers through Bank Constanta, have they increased?
A. Bank Constanta offers international and local money transfers to its customers, such as Western Union, Money-Gram, Anelik, Contact, Intel express, Unistream, and Fast Money Transfer, which are distinguished by their low tariffs and enable customers to send and receive money through our branch network throughout Georgia. According to these terms this product is quite popular among customers; as for other international money transfers, the amount of transactions by April 30 compared to the same period of the last year, had tripled for both incoming and outgoing transfers too.
According to the popularity among existing types of money transfers, Western Union is the most frequently used by our customers, followed by Intelexpress, Contact, Unistream and MoneyGram in terms of incoming ones, and in terms of outgoing ones, Anelik is quite popular together with other type of transfers too. In regards to countries, transfers from Greece and Russia dominate amongst others and as for outgoing transfers, Ukraine has its share together with Russia and Greece.
Q. What amount of finance was attained by Bank Contanta this year?
A. The financial resource attracted from international and local financial institutions in the current year is about 33 million GEL, that is almost the same amount as was attracted in the last year. This increased financial resource has already been reflected in our portfolio growth and will definitely be increased by the end of the year which will consequently amplify our banking activities.
Q. What amount of loans was disbursed throughout 2010/11?
A. The value of loans disbursed in 2010 was about 90 million GEL, which is 78% bigger than the last year. As for the current year, reporting for the period of May 31, 2011 we have disbursed loans of 52 million GEL for developing the micro financial sector, which is 70% greater than the same period of the last year.
Q. How active is Bank Constanta in regards to CSR?
A. CSR is much broader than just philanthropy and entails a broad commitment to protect and improve the lives of workers and the communities in which we do business. It refers to operating a business in a manner that accounts for the social and environmental impact created by the business and it addresses issues impacting virtually every area of operations: governance and ethics; worker hiring, opportunity and training; responsible purchasing and supply chain policies, and energy and environmental impact.
Social-cultural projects are a part of CSR that is also very important for Bank Constanta. We always try to assist and participate in projects that serve to build the values essential to raise a noble and moral society.
During our existence we have implemented and taken part in many social activities, including various festivals and green activities. The most recent ones include the classical music festival “Future Star” for young generations; festival “Art gene”, which involves the whole of Georgia and serves to raise and maintain those traditions and unique culture that are vital for our national and ethnic development; tree planting activities, including a project of forest line renovation in Tserovani village implemented with the Ministry of Refugees of Georgia and with the support of the Ministry of Environment Protection of Georgia. I would like to emphasize that all our projects are long-term oriented and are considered durable partnerships.