The FINANCIAL -- FINCA Bank Georgia is a joint stock company built on a platform developed over 20 years of operations in the country. FINCA Bank Georgia is part of the FINCA Impact Finance Network, a group of 20 microfinance and financial institutions that provides socially responsible financial services and enables low-income entrepreneurs and small business owners to invest in the future.
In the interview with The FINANCIAL, Vusal Verdivev, CEO of FINCA Bank, talks about the challenges, achievements and new trends that the Bank is facing today.
Q. What were the main achievements of FINCA Bank in 2018? What results are you expecting by the end of 2019?
A. The year 2018 was infused with a number of achievements, as well as challenges. Although the institution continued growing, overall the growth pattern was slower than in previous years. To some extent this was due to the number of regulatory changes enacted during 2018, which affected the growth pattern of the overall banking industry. The Bank continued successful diversification towards non-interest income streams and retail business. New regulations and lots of changes stipulated various adjustments in the business model. The Bank continued delivering on its mission of serving our core segments responsibly, effectively and efficiently through innovative solutions as we quickly adapted to new regulatory requirements, developed new products and services meeting the needs of clientele. The main focus has been and will be infusing FINCA Bank Georgia’s products and channels with digital convenience, to ensure streamlined and affordable access to financial services. Therefore, we continue to invest in our digital infrastructure.
Last year we also celebrated the 20-year anniversary of our presence in Georgia. Independent studies show highly inspirational results of our performance in Georgia. As a result of partnership with FINCA Bank Georgia, over 27,000 employments have been generated (36% of jobs created by women), with the prevailing majority outside of the capital city (62% of FINCA Bank clients live in rural areas). 90% of the customers studied noted that they have fully achieved the business goals for which they originally started their partnership with our bank. There is no better success than the achievements of our customers. The success of our customers is our history, and their goals – our future. Therefore, we continue to further progress and improve our business model and services so as to better serve our customers and support them in the achievement of personal aspirations and business goals.
2019 continues to be a year of transformation of business processes. The purpose is to increase our outreach, especially in rural areas through technologically innovative solutions, launch new retail products, and enlarge our network of partners to provide more effective services in all regions of the country. FINCA Impact Finance operates in 20 countries around the globe and Georgia is among the priority markets for the network. Although due to recent regulatory changes expected growth remains moderate this year, there is still an opportunity for us to continue transforming our offerings.
Q. What are the main loan trends at FINCA Bank? How is FINCA Bank adapting to the new regulations?
A. We worked very closely with the National Bank of Georgia and transformed our processes to cope with the new regulations. The core segments we serve, micro and small business owners, who do not have registered businesses, of course need financial support and the business processes in practice at FINCA Bank Georgia fully comply with the new regulations and are adapted to the needs of customers so that we continue effectively serving them responsibly and efficiently. Just recently we have introduced new innovative products, which we believe are unique in the market and correspond to our customer base’s needs. This will support growth of the Bank during 2019 as well.
Q. What are the main challenges that FINCA Bank is facing today?
A. The main challenge is the competition in the market. Regulations have become stricter, all banks and financial organization are downscaling their programmes to reach more and more business owners and the market which historically was served by microfinance/retail oriented institutions. At the same time, not all offerings in the market well serve the needs of the customer base, and often expose them to financial risks. In other words, overall supply of financial services is not a challenge in Georgia, however delivery of the financial services which fully correspond to the needs of the customers and treat them responsibly is still a challenge. The financial literacy level in the country and segments we serve also remains a challenge for the sector. Therefore, our focus is not only on the streamlining of business processes, but investing more and more in educational programmes to support our customers in making financially literate decisions. I am extremely proud that FINCA Bank Georgia is the first financial institution in the country officially certified by Global SMART Campaign for customer protection, and recently re-certified against even more strict requirements.
Q. How do you see the future of FINCA Bank?
A. FINCA Bank Georgia, as part of the FINCA Impact Finance network of financial institutions, is in the process of continuous transformation and streamlining of business processes with the goal of achieving the best customer experience and satisfying the wants and needs of our core segments. As digitalization is the future of the banking sector and we are part of it, along with customer experience improvement projects, digitization will be one of our priorities for our business in the county. We continue to be an unconventional community-based niche bank that profitably and responsibly provides innovative and impactful financial services to enable low-income individuals and communities to invest in their futures.
Q. What do you consider the future of banking? How do you see the future of the Bank in terms of developed internet technologies?
A. As I mentioned above, the future of many businesses is digital. On one hand we invest in technologies and staff development programmes to better adapt to new realities, and on the other hand we see the need for financial and digital literacy of our customers. Therefore, these two directions are of paramount importance to us. In 2019 we already implemented several projects to serve this purpose and intensive work is still underway to bring more and more innovative products and solutions to the market.