Tbilisi, July 15, 2003—
The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, announced today an agreement to provide a US$5 million loan to Bank of Georgia.
IFC funds will be used to support the further development of Bank of Georgia’s mortgage finance and SME lending activities. The project will build on the success of a similar US$3 million credit line extended to the Bank three years ago, which was used to finance 470 mortgage loans. This was the first time in Georgia’s history that a credit line was targeted directly at mortgage financing, and satisfied a demand to expand and improve the country’s housing stock. IFC’s first loan was accompanied by the US-government funded technical assistance to strengthen the Bank’s credit underwriting policies and procedures. In addition, with support from French donor funds, IFC assisted the Bank in developing its internal capacity to produce IAS financial statements.
Providing Bank of Georgia with an additional US$5 million loan will allow it to meet continued demand among homeowners and SMEs. At the same time, the credit line will help the Bank to expand credit to borrowers who would otherwise not have access to financing. This will be particularly true for individuals and SMEs outside of Tbilisi, where the formal financial sector is not well developed. The term funding will help Bank of Georgia diversify its funding base, and allow it to offer longer-term loans.
"IFC is delighted to support Bank of Georgia with an unsecured credit line to finance SMEs and expand mortgage lending. This project represents an excellent use of IFC resources. Expanding finance for SMEs and mortgage lending are two priority areas for IFC, and we are happy to have a reliable partner like Bank of Georgia", commented Mr. Edward Nassim, IFC’s Director for Central and Eastern Europe.
“The agreement signed between Bank of Georgia and IFC is a very positive event, which reaffirms the Bank’s leadership in the Georgian financial markets. This investment opens additional opportunities not only for the Bank and its clients, but for the entire Georgian banking sector,” said Mr. Vladimer Pateishvili, the Chairman of the Supervisory Council of the Bank of Georgia.
Bank of Georgia is one of Georgia’s leading banks with the largest equity base. It is a universal bank providing a variety of banking products and services to its customers, including SMEs and micro-enterprises. The bank has the largest branch network in Georgia, and the only one fully functional throughout the country. This has allowed the Bank to raise deposits, reach regional borrowers with a limited access to banking services, and get a contract to service payments during the Baku-Tbilisi-Ceyhan pipeline construction.
Georgia joined IFC in 1995. Since then, IFC has committed over US$100 million to finance projects concentrated in the financial, infrastructure, power and real sectors. The mission of IFC is to promote sustainable private sector investment in transition economies, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the emerging markets, mobilizes capital in the international financial markets,
helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY02
(July 1, 2001 – June 30, 2002), IFC has committed more than US$34 billion of its own funds and arranged US$21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was US$15.1 billion for its own account and US$6.5 billion held for participants in loan syndications.
