Georgia : GEO: Financial Inclusion for Micro and Small Enterprise Growth
Hruschka, Stefan A.
Private Sector Operations Department
Request for information
10 December 2015
|Project Name||GEO: Financial Inclusion for Micro and Small Enterprise Growth|
|Borrower / Company||Credo Bank JSC
FINCA Bank Georgia JSC
TBC Bank JSC
|Country / Economy||Georgia
|Type or Modality of Assistance||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Knowledge solutions
Private sector development
|Sector / Subsector||
Finance / Inclusive finance
|Gender||Some gender elements|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Portfolio Management Division, PSOD|
|Responsible ADB Officer||Hruschka, Stefan A.|
|Objectives and Scope||The ADB transactions will support financial inclusion for MSMEs and farmers. The proposed ADB assistance comprises (i) a senior loan for Credo of up to $23 million (or its lari equivalent) with a 4-year tenor; (ii) a subordinated loan for TBC of up to $50 million (or its euro or lari equivalent) with a 10-year bullet maturity; (iii) a senior loan for TBC of up to $50 million (or its euro or lari equivalent) with a tenor of up to 6.5 years; (iv) a senior loan for FBG of up to $7 million (or its lari equivalent) with a 4-year tenor; and (v) a TA grant of up to $1.05 million to support (a) TBC's MSME Academy services; (b) Credo's transformation into a bank; and (c) each of the three banks' efficiency improvements and the development of loan and assistance to skills improvement to MSMEs and farmers, including branchless banking and associated financial literacy programs to their customers.|
|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, 20142018.
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.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The TBC environmental and social management system (ESMS) complies with ADB's Safeguard Policy Statement. Given the small average size and caps on subloans, the ESMSs of Credo and FBG are adequate. FBG and Credo will improve their ESMSs before introducing small business lending to satisfy ADB's Safeguard Policy Statement requirements.|
|Involuntary Resettlement||The borrowers' business activities have minimal or no adverse environmental impacts and are unlikely to entail impacts on involuntary resettlement and indigenous peoples.|
|Indigenous Peoples||The borrowers' business activities have minimal or no adverse environmental impacts and are unlikely to entail impacts on involuntary resettlement and indigenous peoples.|
|Stakeholder Communication, Participation, and Consultation||The main stakeholders are borrowers of the project's participating financial institutions. They participate through already extensive market research activity conducted by the institutions in determining the most appropriate lending products for individual entrepreneurs. The project's participating financial institutions have extensive national networks of branches and village councilors through which to engage and empower beneficiaries. The various lending products of the institutions that will be supported through the project are designed for specific socio-economic groups such as the poor and excluded to allow for their inclusion in productive economic activity. The project also includes technical assistance to support loan product offerings and enhance the efficiency of services through branchless banking.|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||29 Jun 2015|
|Credit Committee Meeting||-|
|Approval||10 Dec 2015|
|Last PDS Update||24 Feb 2016|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Credo Microfinance Organization Financial Inclusion for Micro and Small Business Growth: Extended Annual Review Report||Extended Annual Review Reports||Oct 2019|
|საქართველო: ფინანსური ჩართულობა მიკრო და მცირე საწარმოთა ზრდისათვის („კრედო“)||Translated PDS||Feb 2016|
|Financial Inclusion for Micro and Small Enterprise Growth (Credo Microfinance Organization, FINCA Bank Georgia, and TBC Bank): Report and Recommendation of the President||Reports and Recommendations of the President||Dec 2015|
|Financial Inclusion for Micro and Small Enterprise Growth (Credo): Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Jun 2015|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
Boosting Business in Rural GeorgiaOutside Georgia's main cities opportunities for business are limited. ADB is working with Georgian banks to train entrepreneurs and provide loans to small businesses so they can grow.