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Description |
The ADB transactions will support financial inclusion for MSMEs and farmers. The proposed ADB assistance comprises (i) a proposed loan of up to $23,000,000 or its lari equivalent to Credo Microfinance Organization (Credo); (ii) a proposed loan of up to $7,000,000 or its lari equivalent to FINCA Bank Georgia (FBG); and (iii) proposed loans to TBC Bank (TBC) consisting of (a) a subordinated loan of up to $50,000,000 or its euro equivalent or its lari equivalent, and (b) a senior loan of up to $50,000,000 or its euro equivalent or its lari equivalent, for the Financial Inclusion for Micro and Small Business Growth in Georgia. |
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Linkage to Country/Regional Strategy |
Under the Midterm Review of Strategy 2020, ADB aims to strengthen its support for the finance sector by assisting the development of financial infrastructure, institutions, and products and services; and by promoting inclusive growth. The borrowers' emphasis on funding segments where the potential for employment and income generation is high will support inclusive growth. The ADB loans will help the borrowers provide loans to MSMEs in order to realize their investment needs. This is consistent with the government's efforts to promote growth in rural areas and ADB's country partnership strategy for Georgia, 2014 2018.
ADB plays a tangible role in supporting the deepening of financial services in Georgia. Since 2007, ADB has provided nonsovereign loans of $125 million to banks, comprising two loans to Bank of Georgia and one loan to TBC, as well as TA to NBG and TBC. Bank of Georgia and TBC also benefit from ADB's Trade Finance Program, with an exposure limit of $30 million. The loans to TBC will build on the ongoing loan; the loans to FBG and Credo will be the first. ADB nonsovereign efforts align with efforts to develop the local currency bond market, as well as sovereign support for capital markets, including contractual savings under a program approved in 2014. Staff of the ADB Central and West Asia Department participated in processing the transactions.
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