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
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.