Bank of Georgia Increased Net Loans by 7.2% in 2013

The FINANCIAL — Net loans issued by Bank of Georgia amounted to GEL 3,283.5 million as of 30 September, 2013.

The FINANCIAL — Net loans issued by Bank of Georgia amounted to GEL 3,283.5 million as of 30 September, 2013. The figure grew by 7.2% compared to the same period last year. The Bank attracted USD 10 million term loans from Citi and Overseas Private Investment Corp (OPIC) so that it can provide financing for small businesses in Georgia.

“The loan will be the first from Citi and OPIC, the US Government’s development finance institution, for the microfinance sector in Georgia, and as part of Citi and OPIC’s joint global initiative to support microfinance lending in emerging markets, “said Irakli Gilauri, Chief Executive Officer, at Bank of Georgia, one of the leading Georgian banks.

“The newly-drawn facility will further enhance the Bank’s competitiveness in micro lending, a segment that makes up a sizeable part of the Bank’s retail banking loan portfolio. This facility will also allow the Bank to continue supporting the development of small businesses, which is fundamental for the growth of the country’s economy,” said Gilauri.

Out of the total loan portfolio micro and SME loans amounted to GEL 459 million, as of 30 Sept, 2013. Micro loans are up 22.7% compared with the same period last year, SME loans are up 41.9% compared to 30 Sept, 2012.

“Expanded access to finance for the micro and small enterprise sector has the potential to accelerate economic growth in Georgia and broaden financial inclusion for those outside the economic mainstream,” said Steve Donovan, Citi’s Regional Executive of Treasury & Trade Solutions, MENA, Turkey and Central Asia. “This transaction demonstrates and reinforces Citi’s and OPIC’s shared commitment to unlock opportunities to access both start-up and sustaining capital for aspiring and established small businesses.”

“Small businesses are fundamental to economic growth and job creation but often still struggle to obtain the financing needed to support and expand their operations,” said Elizabeth L. Littlefield, OPIC President and CEO. “OPIC’s longstanding partnership with Citi has provided financing to thousands of micro and small-businesses in regions that are underserved by the financial sector and we are delighted to expand this same partnership to Georgia,” Littlefield added.

Into Q3 2013 the Bank reached a record nine-month profit of GEL 153.7 million. “Loan book growth picked up in Q3 2013 increasing 5.1% since June 2013, supported by the roll-out of a new Lari mortgage and SME product offering the lowest mortgage interest rate on the market at 7.9%,” said Gilauri.

In his words, since the launch of the NBG Lari programme in May 2013, the floating Lari rate mortgage and SME loan portfolios reached approximately GEL 40 million, indicating a strong demand for Lari denominated products, which further supports the ongoing de-dollarization of the balance sheet of the Bank as well as the entire Georgian banking sector.