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ADB Assists Bank of Georgia to Provide Supply Chain Financing to SMEs

News from Country Offices | 25 November 2019

TBILISI, GEORGIA (25 November 2019) — The Asian Development Bank (ADB) has provided a technical assistance grant to the Bank of Georgia, enabling it to offer working capital and other supply chain services to small and medium-sized enterprises (SMEs) in the country.

The Bank of Georgia is one of the largest domestic providers of loans to large corporations and individuals in Georgia, but it has not to date extended credit to SMEs. Under the terms of the grant, ADB will deploy three consultants to help the bank establish its SME lending platform, including advising on supply chain financing and market leading technology.

The grant is ADB’s first technical assistance to be disbursed under its Supply Chain Finance Program, and an extension of its existing trade finance relationship with the Bank of Georgia, to which it has provided loans and guarantees since 2011.

“We are pleased to be working with ADB, which will help us to begin offering supply chain financing and other services to SMEs,” said Bank of Georgia’s Head of SME Business Banking Mr. Zurab Masurashvili. “The time is right for Georgia to evolve from the traditional trade finance environment to using supply chain finance to further support SMEs and trade. Our partnership with ADB will help us to deliver tangible benefits for economic growth in Georgia.”

Faster economic growth and job creation are key benefits of trade, particularly for relatively smaller, developing economies. But SMEs are often seen as a riskier segment by commercial lenders and they often struggle to access the credit they need to grow. Around 45% of all applications made for trade finance by SMEs are rejected worldwide, contributing to a global trade finance gap of an estimated $1.5 trillion, according to ADB’s latest Trade Finance Gap, Growth, and Job Survey.

“There is significant demand from our partner banks for assistance in terms of market leading technology and other aspects of their supply chain businesses,” said ADB’s Head of Trade and Supply Chain FinanceMr.  Steven Beck. “Given that we already support our partner banks with liquidity and risk sharing, offering advisory services is a natural evolution—and we are pleased to launch this initiative with the Bank of Georgia.”

ADB launched its Supply Chain Finance Program in 2012 under its Private Sector Operations Department. To date, it has extended guarantees and loans worth more than $36 billion to more than 240 partner commercial banks across Asia and the Pacific.

Bank of Georgia is a universal bank in Georgia offering a broad range of retail and corporate banking, and investment management services. It is listed on the main market of the London Stock Exchange through its ultimate parent company, Bank of Georgia Group PLC, which is a constituent of the FTSE 250 Index. Bank of Georgia has credit ratings from global rating agencies: ‘Moody's: ‘Ba3/’Ba2, Fitch Ratings: ‘BB-’, with ‘Stable’ outlooks.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.