The FINANCIAL — Bank of Georgia has become the first Georgian bank to join the International Financial Corporation (IFC) Global Trade Finance Program (GTFP).
“We are very pleased that IFC has selected the country’s leading trade finance provider as its first Georgian partner bank under the Global Trade Finance Program. This renewed partnership will enhance our trade financing capability and strengthen trade in the region,” said Nicholas Enukidze, Chairman of the Supervisory Board of Bank of Georgia.
The Bank of Georgia is Georgia’s leading bank, with the largest asset, loan, deposit, and equity base. On July 31, 2008, the bank held a 34 percent market share by total assets. The bank has credit ratings from all three major rating agencies: Standard & Poor’s, Fitch, and Moody’s.
IFC, a member of the World Bank Group, will provide the bank with a trade finance line of USD 20 million, allowing it to provide guarantees against its clients’ trade transactions and facilitate export-import trade in the country.
“Bank of Georgia has become the first Georgian bank after the war that got financial assistance. This financing will further help the country’s economic development. It underscores IFC’s confidence in the Georgian economy and in Bank of Georgia,” Irakli Gilauri, BOG General Director, told The FINANCIAL.
As Gilauri said, BOG is having negotiations with some international organization and in October or November the bank plans to attract USD 240 million, which will be used on fiscal and also on corporate clients. BOG has been getting credit from IFC for a long time, this recent one is the fifth or sixth precedent.
Gilauri stated that getting a loan at BOG since the Russo-Georgian war won’t be a problem. In September the bank issued GEL 80 million. From October BOG will issue all kinds of loans.
“Information spread that BC bank is financed by IFC is not true. IFC is going to cooperate with other Georgian banks in the future, but I can’t yet comment on which banks they will be, or what kind of assistance we will offer,” Tamar Barbakadze, Communications Associate, IFC Georgia Business Enabling Environment Project, told The FINANCIAL.
“In the current fiscal year we plan to invest up to USD 300 million in the country and complement our investments with extensive advisory services,” she added.
The IFC Global Trade Finance Programme supports trade with emerging markets worldwide and promotes the flow of goods and services to and from developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks.
The programme allows issuing banks to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms. Participating banks gain access to finance and a network of global correspondent banks worldwide.
“IFC is one of the owners of ProCredit Holding stocks. We have been cooperating with IFC for a long time and we will continue partnership in the future. At present our bank’s liquidity quality is very high, and now we don’t need financial assistance,” Lali Svimonia, PR Manager of ProCredit Bank Georgia, told The FINANCIAL.
On September 24, Snezana Stoiljkovic, IFC Director for Central and Eastern Europe, met with Georgian Prime Minister Lado Gurgenidze, to discuss IFC’s ongoing support to Georgia’s private sector.
IFC, a member of the World Bank Group, is strengthening support of its client banks to contribute to the stability of Georgia’s financial sector and ensure access to finance for local companies. The meeting also discussed possible IFC support to improve the business enabling environment, expand access to finance for smaller businesses, and encourage private investment in the country’s infrastructure.
IFC has participated in the ongoing needs assessment led by the World Bank and will conduct a survey of small and medium enterprises to assess their needs and design relevant products for their financing.
“Bank of Georgia has been an IFC client since 2000, and with this trade line we are happy to expand our partnership. It is part of a targeted series of investments that IFC will be making with existing client banks to support the banking system and sustain access to finance for local small and medium enterprises and individuals,” Snezana Stoiljkovic, IFC Director for Central and Eastern Europe, said.
“The commitment to provide trade finance enables businesses to reach new markets, under competitive terms. As the leading banking group in the country, Bank of Georgia’s partnership with the Global Trade Finance Programme will support transactions in emerging and post-conflict markets,” Georgina Baker, IFC Director for Global Financial Markets and Short Term Finance, said.
Georgia joined IFC in 1995. Since then, IFC has approved more than USD 100 million in investments in the country, mainly projects in financial services, infrastructure, and manufacturing.
As of July 1, 2008, IFC has committed nearly USD 225 million in 26 projects in Georgia’s financial, power, oil and gas, and manufacturing sectors. In addition to investments, IFC conducts advisory programmes in Georgia to promote corporate governance and improve the business environment with the support of BP and its oil and gas partners and the Canadian International Development Agency.
Georgia has moved 6 points forward from 21st to 15th position on World Bank’s Doing Business 2009 List by World Bank and IFC. Georgia still keeps position in Top 25 of Ease of Doing Business. Ukraine is in the 145th place, down by four points compared to last year.
Georgia was the top reformer in the Commonwealth of Independent States (CIS) and led the global top 10 reformer rankings on the ease of doing business in 2005–2006, according to recent previous report by the WBank and IFC.
In 2007 Georgia bacame included in 10 Top List once again. "Georgia reformed in six areas. It strengthened investor protections, including through amendments to its securities law that eliminate loopholes that had allowed corporate insiders to expropriate minority investors. It adopted a new insolvency law that shortens timelines for reorganization of a distressed company or disposition of a debtor’s assets. Georgia sped up approvals for construction permits and simplified procedures for registering property. It made starting a business easier by eliminating the paid-in capital requirement. In addition, the country’s private credit bureau added payment information from retailers, utilities, and trade creditors to the data it collects and distributes", report said.
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