EBRD Gives ProCredit Bank Georgia $15 Million Boost
Micro and Small Enterprises Will Benefit from More Access to Finance
ProCredit Bank Georgia (PCBG) is receiving a $15 million syndicated loan arranged by the EBRD to help meet the growing needs of local entrepreneurs in Georgia. The loan is the second loan to be syndicated to a financial institution in Georgia and will provide PCBG with access to international capital markets.
EBRD is the lender of record for the full amount and is providing a three-year A loan using $8 million of its own funds and $2 million of the TaiwanICDF’s contribution to the Financial Intermediary Investment Special Fund. A further $5 million is being syndicated to Citigroup under the EBRD’s A/B loan structure.
PCB Georgia is a development oriented full-service bank and market leader for financing small businesses in Georgia. Established in May 1999, PCB Georgia is owned by ProCredit Holding, IPC and Commerzbank. The total volume of the business loan portfolio reached $162 million as of June 2007, and 35,500 in number, from which almost 96 per cent are micro loans worth less than $20,000. All loans are provided on a commercial basis.
It is also actively entering the agricultural lending sector through its growing network of regional branches. It disburses farmer’s loans for the acquisition of seeds, fertilizers and animals as well as loans for the rural sector for purchasing agricultural equipment, machinery and land. PCB Georgia offers loans for the acquisition of seeds, fertilizers and animals as well as for the purchase of agricultural equipment, machinery and land.
Olivier Descamps, EBRD Business Group Director, said that micro and small businesses are critical for economic development and increasing employment opportunities, yet they often lack access to finance. This latest loan directly supports this dynamic sector in Georgia. “The role entrepreneurs play in promoting the transition towards a market economy cannot be overstated, and that is why we pay so much attention to this sector,” he added.
Philipp Pott, General Manager of ProCredit Bank, said: “This syndicated loan and the increasing diversification of our funding base in general highlight the growing maturity of the bank. The additional financing will help us to extend our outreach among small businesses and agricultural clients across the country. ProCredit Bank’s eight-year track record in Georgia and the maturity of the institution is the best guarantee our small business clients can have for the stability of their financial partner.”
Bob Annibale, Global Director of Citi Microfinance said, ”Citi is pleased to have participated in this transaction with EBRD and PCBG. We are now working with ProCredit group, a global leader in microfinance, in many countries where we are both present and with this transaction, and beyond.”
Georgia is part of the EBRD’s Early Transition Countries Initiative (ETCI), launched in 2004. The program aims to stimulate market activity in the Bank’s lowest-income countries of operations by using a streamlined approach to financing more and smaller projects, mobilizing more investment, and encouraging economic reform. The initiative is part of an international effort to address poverty. The Bank will accept higher risk in the projects it finances in the ETC countries, while still respecting the principles of sound banking.
Through its micro and small enterprises programs, the EBRD has supported over one million small enterprises throughout Eastern Europe, Russia, Central Asia, and the Caucasus. Across its countries of operations, the EBRD has committed over $1 billion to 105 financial institutions to facilitate loans to some 2 million micro and small businesses in the region.
In Georgia the EBRD has supported the establishment of a microfinance lending program at 5 leading commercial banks.
As of December 31, 2006, the Bank had signed a total of 72 investment projects covering energy, transport, agribusiness, general industry and banking for a total commitment of € 398.8 million. As at year-end, the Bank’s net portfolio in Georgia stood at € 265.1 million. Total EBRD commitments in Georgia have increased to EUR 399 million. Over the past two years the Bank has almost doubled its portfolio for SME finance and its current pipeline for the year 2007 is about €40 million. The number of operations signed annually increased from four in 2003 to 22 in 2006, with nearly all new commitments made in favor of the private sector.
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