ProCredit Bank has established itself as one of the driving financial forces in the fierce Georgian market. The FINANCIAL reached out to Marcel Zeitinger, the Chairman of the Supervisory Board of the bank, who responded to the barrage of questions posed to him with insights on the corporate activities and future plans of the bank in Georgia.
Q. How would you estimate the learning experience in the bank’s 20 years of existence?
A. Everything started in Georgia – as in the group – with the desire to build a financial institution in developing countries to provide society and businesses with access to basic banking services, which were lacking back in those days.
Following the post-Soviet era in the 1990s, when numerous businesses were emerging, financial support was a key contributor to their success. Within the first 10 years of its existence, i.e. since 1999, ProCredit Bank aided these very small businesses in Georgia by financing capital investments. However, we also came to the realisation that focusing solely on such micro enterprises would not adequately foster the development of the economy. In my estimation, the vision of ProCredit group has always revolved around raising productivity and institutional transparency. The group’s decision a decade ago to focus the business strategy on financing small and medium enterprises (SMEs) has definitely enabled us to do this even better.
Witnessing the growth of our clients in Georgia has been a breath-taking experience, evolving from humble beginnings 20 years ago into robust small and medium enterprises which have been constantly investing and creating jobs.
Q. What is your primary role in supporting businesses?
A. ProCredit Bank’s role in Georgia can be described as supporting SMEs in investing in their business, ranging from financing working capital to longer-term investments and “green investments”, meaning resource-efficient technologies or renewable energy.
In its efforts to support the target business segment, ProCredit also cooperates with international financial institutions, which results in extra funding for Georgian SMEs. Within this framework, the additional funding from the most recent agreement between the ProCredit group and the European Investment Fund (EIF) will enable the bank to support innovative small and medium-sized companies.
Moreover, ProCredit Bank strives to provide clients with all the financial services they need for their business by providing a secure online environment for conducting card transactions, offering domestic and international payments and efficient transactions via e-banking, creating comfortable 24/7 Zones equipped with high-tech machines, and giving professional advice on liquidity management, documentary business and trade finance.
In taking these steps, ProCredit Bank seeks to engage in a long-term partnership with its clients that is fruitful for both sides. Key to this approach are the bank’s Business Client Advisers, highly trained professionals who are not driven by bonus systems and are therefore able to prioritise the client’s best interests and long-term success. In this way, ProCredit Bank aims to be the Hausbank for SMEs.
Q. What do you consider to be your greatest achievement over the years?
A. The greatest achievement is that our clients have used our financial support to expand their businesses, invest in new technologies and create employment. In my view, ProCredit Bank has also contributed to reducing informal business practices, providing financial services during difficult times for the country and improving institutional transparency.
Another important success is the high quality of our staff, who show their commitment every day. As odd as it might sound, ProCredit Bank Georgia does not prioritise maximising profits, but rather strives to show a stable return on investment, as we believe that profitability at any expense will lead to unhealthy development and rapid downfall. This distinctive trait is equally embodied in our social, economic and environmental commitment. I am proud of the way ProCredit Bank’s staff transmits these values.
Q. What are the advantages of becoming a ProCredit Bank client?
A. Some of the key advantages are the professional level of cooperation and the built-in transparency in our communication. In addition, the competitive pricing for various services, such as international money transfers with the goal of increasing exports, makes the services much more appealing. The bank’s sole focus on its role as a financial institution enables it to deliver excellent service and independent advice. Clients also benefit from the international network of ProCredit banks, as the ProCredit group is present in 10 countries in South Eastern and Eastern Europe, and is among the largest banking groups financing SMEs in these countries.
Q. As competition in the finance sector has become very fierce, how do you plan to come out on top?
A. The distinction begins with ProCredit Bank being the sole Western European bank on the Georgian market. It applies the highest standards with regard to risk management, as the ProCredit group is additionally regulated by the German financial authorities via its parent company ProCredit Holding. This provides extra financial security for ProCredit Bank and its clients. This is reflected in the bank’s Fitch rating, which is the highest credit rating in the Georgian banking sector, and it ranks even one notch above the sovereign rating for Georgia.
Another factor that sets us apart is the quality of our staff: on average, the ProCredit group provided 18.3 days of training per employee in 2018, as described in its Impact Report. In addition to imparting useful skills in bank-related areas, the training courses also include humanities subjects, such as history and political economy. This unique training enables ProCredit Bank to offer its clients in Georgia the highest level of professional service.
Q. What are the plans for the future?
A. ProCredit Bank will continue to focus on financing SMEs and their innovative and environmentally friendly investments. In addition to serving businesses, ProCredit Bank strives to be a top-notch direct bank for private individuals by offering modern banking services through all its channels, primarily digital ones. A transparent all-inclusive fee structure gives our private clients the benefit of conducting most of their activities without additional hidden costs. On its way to becoming a fully-fledged digital bank, ProCredit will continuously invest in new technologies, exemplified by the recent implementation of the IDNow technology, which is unique on the Georgian market.
Q. How does ProCredit Bank incorporate CSR (Corporate Social Responsibility) into its activities?
A. ProCredit Bank has a fully integrated Environmental Management System that has helped to measure and reduce its ecological footprint. For example, the car fleet now consists mostly of hybrid and electric vehicles. A rainwater sewage system at the bank’s headquarters in Tbilisi helps to reduce fresh water usage. These are just a few of the measures that have helped the entire ProCredit group to reduce its emissions by 15% in 2018 alone. This ecological commitment is complemented by the bank’s continuous focus on staff development. The fact that ProCredit Bank ranks among the most responsible banks in Georgia and Eastern Europe is exemplified by its outstanding impact ratings on this subject: a “Prime” rating by ISS Oekom and a rating of AA by MSCI ESG Research.
I am fully aware of the use of the established term “CSR” in business and academic literature. However, it would be inaccurate to assume that we implement green or social activities merely because we feel we have to. Far from it: Our actions are driven by the desire for a better future, not by obligation.
Q. What is the main challenge for the Georgian market?
A. One of the things that concerns me the most is the amount of cash that is being circulated in the economy, which I consider as a sign of informality. There are numerous intangible ways of payment that are being implemented, indicating that the country is moving towards reducing informality. However, the quantity of cash in circulation definitely requires attention. Nearly all of ProCredit Bank’s payments are already cashless.
Another striking aspect is the sheer volume of physical currency conversion opportunities. People are therefore subjected to frequent visual exposure to exchange rates and forced to think about them – and naturally about buying or selling currency – time that could have been spent on increasing real productivity or on recreational activities. In my opinion, frequent currency conversion, especially in cash, promotes informality and creates a negative environment, and thus impedes the unlocking of Georgia’s economic potential
Another challenge lies in improving access to green finance for small and medium-sized enterprises in Georgia, which I deem important for the sustainable development of the country. In this context, the role of the policy-makers and commercial banks is paramount. ProCredit has been promoting green financing since 2012 with the aim of supporting resource-efficient business operations and improving our living environment.
