Financial institutions, especially banks, play a big role in promoting small and medium-sized businesses. Business, in turn, is a major player in the country’s economy and urban development.
In an interview with The FINANCIAL, Vazha Menabde, MSME at Liberty Bank, spoke about the role of Liberty Bank as one of the leading banks in the urban development of the capital, also highlighting the implemented projects and future plans which the Bank is actively working on.
Q: What is the role of Liberty Bank in terms of the urban development of Tbilisi?
“In terms of urban development, Liberty Bank is carrying out activities in several directions. As you know, we are a commercial bank and the main contribution we can make is to finance businesses that in turn implement important urban projects in the capital and other cities.
Development financing is a relatively new direction specifically for Liberty Bank. Naturally, we had separate projects, but for the last year we have started working more actively in this area. I would like to emphasize the significantly different circumstances that there were during the pandemic period when businesses and the economy in general were in trouble and it was very important for banks to have certain activities in place and proper lending. It was during this period that we started actively financing projects. Naturally, we are not a very big player in this direction today. We can say though that our share in this direction is proportional to the Bank’s overall share of the market.
We have about 30 development contracts at this stage; partnership contracts that we are helping with the implementation of their projects, providing financial resources to, at the same time helping with sales, and providing mortgage loans to their clients.
When selecting these projects, we attach importance not only to the financial side and the profitability, but also try as much as possible to take into account how well this project fits into the appearance of the capital, how important it is and what problems it solves. We pay important attention to this direction when making decisions.”
Q: What are some important projects that the Bank has launched recently?
“One of our most important projects that I can single out is one we have started recently and not yet finished. We are actively working to improve access to real estate for immigrants. As you know many of our fellow citizens are abroad, working, creating savings and eventually wanting to return home. They want to buy a property in the homeland with their existing savings, be it an apartment, a house or something else, and in this regard we try our best to simplify this business and access to finance.
Collecting all the money needed to buy an apartment is very difficult therefore we try to help the citizens to achieve this goal through our participation. It would be in the form of a loan or other co-payment, which they will pay in stages and eventually have their own place of residence in their homeland. We are working very actively on this and we hope to launch a very good project soon that will help the developers, our fellow citizens, and will be good for the economy in general.
Q: What is Liberty Bank’s contribution to improving the architectural appearance of the city?
“We try our best to match the design and appearance of our branches to fit well with the development of the city, at the same time as trying to be modern. Proof of this is the building where we are now, which I think turned out very nicely. All the branches of this line, wherever we open, will be of this same design.
This is a modern, loft design, not intended for just one year. We think this line will be very long-lasting and will remain trendy in the long run. We also involved foreign architects in creating this design and I think it turned out pretty well. Financially, we want to help businesses and our partners, so where we do something ourselves we try to do it in a way that is beautiful, modern and in line with the environment in which the building sits.
People should want to enter such an exterior and admire the interior, and we have achieved this. We already have several branches, up to 10 of them, and we have even increased our coverage with such a network where an ultra-modern yet simple, plain, pleasant, quiet environment meets our customers.”
Q: Lending to small and medium-sized businesses is a major challenge worldwide. How successfully do you cope with the growth of SME financing?
“Looking at the growth dynamics of Liberty Bank loan portfolios over the last year, the Bank has been growing quite successfully despite the pandemic and related negative factors. Basically, the market share of Liberty Bank in terms of business lending has increased significantly in the last year.
The reason for this is probably that firstly, we have the largest network in Georgia and the largest coverage in terms of branches. We have all the major regions covered. And secondly, we have a well-defined and selected lending policy. Stopping lending in times of crisis is not a solution, it is neither good for the consumer, nor for the Bank, and the economy in particular. In times of crisis it is important to have the right lending, the right structuring of loans. At such times, we need to finance precisely those businesses that really need the money, and that money will really help them overcome this crisis and further develop it.
The second thing we and the other banks were doing out of necessity was to defer loans, to set grace periods. If a business has a temporary problem, you should do your best to help solve it. This temporary problem will pass and normal life will resume. So during this period we were moderately aggressive, i.e. we tried to work rationally, not to give out too-risky loans, however where we saw the opportunity we were not afraid, we boldly financed and this brought about the result that our market share has increased significantly in the last year.
We continue to do the same today. Our main focus as a bank is lending and the development of small and medium businesses and we think that there is a lot of work to be done in this direction. Among them our main starting point is the consumer and the whole attitude of the business is not focused on products, but instead on the customer, i.e. we want to think in general about what a person wants.
Q: How do you measure customer satisfaction and do you have any mechanism developed in this regard?
“It is very important for us what the customer thinks about us, how satisfied they are and in addition, what they need from us and what they need to receive; what kind of service they need to receive. To do this, we naturally conduct surveys to measure customer satisfaction, and from the latest survey I can share with you that we received 94% satisfaction, which is a very good result. We are very happy, however it is not a case of us remaining satisfied and stopping. Daily care is needed to maintain this result even if you have a very high result and in that way it will continue evenly. We will regularly check where we have a problem, where we need to improve and once again I say the starting point is the customer, customer satisfaction and their needs.”
Q: What is the role of the business sector and foreign investment in the urban development of the city?
“In general, the role of business in the urban development and even in the economic development of the city is great, i.e. the administrative bodies, be it the City Hall or the governing bodies, can make legislative regulations, but the main driving force in the development of the city should be business.
Businesses need to develop construction as well. Businesses need to open new facilities, be they services or other areas, and the activity of banks, financial resources and the role of business is crucial in this regard. We try our best to credit and contribute to all real, viable business facilities that will benefit the economy and the development of the city. Without business nothing will come of it. The answer is simple and business needs support from financial institutions and that is proper advice, support, financing, properly structured loans. Credit is good when you take it for the right purposes and in the right direction. However, if you take it for the wrong purposes and make the wrong commitment, then it can also lead to the wrong result. So the administration and the banks all need to support business so that it can grow and develop both the city and the economy.”
Q: What are your future goals and vision for development?
Our vision and our philosophy are simple. We are a bank everywhere and for everyone, we are a bank for every family and we want to become a bank for every business. The door of Liberty Bank is open to all customers, where you will find good service, customized products and any customer will feel that Liberty Bank thinks specifically about them as a person, a business, a specific customer, and receives an offer tailored specifically to them. This is based on our business vision, our business strategy, and we believe that with such an approach we will be quite successful in the coming years. The main activities will be in the field of small and medium business, and retail.
As you know, a very large proportion of our customers are our older generation customers, our deserving grandparents and pensioners. We already had a pretty good loyalty programme for them, discounts at pharmacies, grocery stores, and for healthcare services. However, we are planning additional loyalty programmes from mid-July. We think that we will have very interesting offers in this direction, to make each of our senior generation customers, who are the most deserving customers in principle, feel special and give them what they need most in terms of banking and not only in terms of banking. We will have a more detailed presentation on this later and inform the public about our plans where I will say more. In the meantime we would be very happy to receive ideas for initiatives, real, good advice on what else we can do for those who we want to show our appreciation of.”