The FINANCIAL — Constanta Bank, one of the fast growing small banks in Georgia, distributed a total volume of 83 million GEL loans in the year 2010, which is 66% more compared to the figures of 2009. Bank will offer plastic cards next year.
Constanta has been operating in the Georgian financial market since 1997 as a micro-financing organization. During this period the Bank provided financial aid to thousands of small and medium size enterprises. In 2008 Constanta received a license from the National Bank of Georgia and started to operate as a commercial bank.
“The major direction of the Bank is to provide lending to the micro financial sector in the capital as well as in the regions,” said Levan Lebanidze, General Director of JSC Constanta Bank.
Bank Constanta offers several types of business loans for different purposes to clients. The minimum amount of a loan is 60 USD, going up to 200,000 USD, the length of the loan varies from 3 month up to 5 years. The interest rate depends on several parameters and starts from 15%. Moreover, there are easier terms on loans – up to 2,000 GEL for small enterprises.
The number of Bank Constanta clients has reached 16,000, with 36% increase during the year 2010.
In his interview with The FINANCIAL, Levan Lebanidze analyzed the operations and activities of the Bank in 2010 and spoke of future plans for the Bank’s development.
“The year 2010 was quite important for the bank’s development. The company developed the product base which was offered or will be offered in the near future to clients. The credit portfolio, the number of lenders and clients increased significantly in 2010. Moreover, the Bank offered non-credit products to its clients and the tendency will continue next year also.
The Bank was joined by a foreign shareholder which was another important factor during the year 2010. Investment was made by international financial organization Oikcredit. The joining of Oikcredit is important for the Bank not only for receiving financial resources but also by sharing know-how and experience. This will help the Bank to offer more high quality and differentiated service to small businesses, which is both important for the Bank’s success as well for the development of micro crediting in Georgia”.
Q. What are your expectations of 2011?
A. We hope that the year 2011 will be more dynamic than 2010. This year the tendencies of market improvement were outlined. From the second half of the year we saw improvement of the credit portfolio in the whole market, business activities increased significantly and we strongly hope that the dynamics will be growing during the year 2011.
It is vital for the Bank to follow our mission and find ways which will make the company closer to its clients, offer products which apply to their needs. These are our missions which we plan to accomplish in 2011.
Q. Which products are most interesting and demanded by your clients?
A. Our clients are most interested in the wide spectrum of financial services as well as other operational products. For a certain period we were mainly focused on credit products. However, we actively started to offer non-credit products to our clients during recent times.
Q. What is the Bank’s business strategy for the years 2011-2012?
A. All the strategies the Bank applies to are directed to the service of our target audience, which is micro-financing in Georgia, micro enterprises which need financial support. We will focus on this mission during the following years.
Q. How does Bank Constanta support development of small business in Georgia? What was the total capacity of loan giving in 2010 and which directions are most financed?
A. High quality financial service and increase of accessibility is of vital importance for small businesses, consequently in case of right processes this has vital importance for business development. If we provide our clients with needed products for their business, this will be quickly and positively reflected in their business and later in the well-being of each stakeholder. Consequently the mission – to plan wisely and provide what is needed to our clients – is vital for our business.
Our target audience is small enterprises with different profiles. This might be small stores, service units, transportation. The agriculture sector is of vital importance for us and we are trying to actively finance this direction.
Q. What credit politics will the Bank have in financing small businesses in 2011?
A. We are maximally trying to be fair. To define correctly the needs of the clients and avoid lending additional amounts to them is of vital importance for the Bank as well as for business functioning itself.
Business should be financed with the exact volume of resources which is needed for the entity. If the liability is more compared to the amount the company can pay back, then the loan would be additional luggage for the company and business might incur losses. Consequently, crediting with the right amount is vital at the Bank and we maximally try to avoid distributing additional amounts. This holds huge importance for the Bank, and consequently this is well reflected in the quality of the credit portfolio, which means that the work of our clients is going fairly well.
Q. In 2010 International Finance Corporation started cooperation with Bank Constanta to help the Bank increase lending to smaller businesses. What importance does this cooperation have both for the Bank as well as for clients?
A. The project of IFC which started at Constanta is quite important. This is a project of improving risk management. Constanta is the first bank in Georgia with which IFC started cooperation on this project. Risk management in each structure has great importance, this means that the company pays more attention, care and responsibility to business processes in the organization. The improvement of risk management is always followed by better functioning of the financial institution which transfers to the client, better service and dynamics towards this direction.
Q. What criterions should a small company satisfy to get loans from the Bank?
A. In general we should see that the field in which the business operates is important for the Georgian economy as well as for society. Moreover at later stages we evaluate the business operations, functions and management.
Q. Since 2008, National Bank of Georgia gave a license to Constanta to start commercial operations. What were the stages in the Bank’s development during these two years?
A. Before the year 2008, the organization mainly worked with credit clients. We are the first micro financial structure in Georgia to have started our operations since the year 1997. Before that time, there was no financial institution working with this segment. However, after some period we recognized that our client bases except for credit products needed other financial services and due to this fact we decided to continue our operations as a commercial bank. After the year 2008, we managed to offer our clients non-credit products such as money transfers, utility payments.
Q. What was the volume of total money transfers in the year 2010? To and from mainly which countries are money transactions conducted?
A. The total volume of money transferred reached 3 million USD in the year 2010. The major transactions are with the Russian Federation, Turkey, Greece and the USA.
The customers of Bank Constanta can use those money transfers, which are widely used in Georgia like Western Union, Unistream, Intelexpress, MoneyGram, and Anelik. Moreover, in Georgia the Bank offers express money transfers to its clients, which are differentiated by their low tariff compared to their analogues in the market and are quite popular with clients.
Q. What activities are done at Bank Constanta within the framework of Corporate Social Responsibility?
A. Within Constanta’s operations in the market, the Bank tries to take part in solving different social and ecological problems. After becoming a bank institution Constanta became more active in these directions.
During 2010 several activities were conducted including: sponsorship of Art-Geni Festival and a concert for homeless children.
There was also a project of restoration of the forest in Tserovani, near the territory of the IDPs’ settlement. The project will support not only the restoration of natural resources but will create better conditions for IDPs to be involved in agriculture work.
For Bank Constanta such types of social projects will become more of a priority in 2011, as the company analyzes the role of corporate social responsibility towards strengthening businesses and the whole of society, which in turn is the long-term strategy of the Bank.
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