EU, EIB Group and local Banks support over EUR 90 million of loans for Georgian SMEs

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1 Tbilisi/Luxembourg 29/11/ :59 PRESS RELEASES EU, EIB Group and local Banks support over EUR 90 million of loans for Georgian SMEs The European Investment Bank (EIB) and the European Investment Fund (EIF) jointly the EIB Group today signed guarantee agreements with banks in Georgia to support the equivalent of over EUR 90 million of lending to Georgian small and medium-sized enterprises (SMEs). The European Investment Bank Group and TBC Bank signed two guarantee agreements: i. ii. an InnovFin agreement for innovative Georgian small and medium-sized enterprises (SMEs) and small mid-cap companies, and a guarantee agreement under EU4Business initiative targeting small loans to SMEs. The InnovFin agreement will enable TBC Bank to provide up to EUR 80m of loans to innovative companies over the next two years with the support of a guarantee provided by the EIF, backed by Horizon 2020, the EU Framework Programme for Research and Innovation. The InnovFin guarantee agreement covers 50% of each loan disbursed by TBC Bank. The second guarantee transaction under EU4Business initiative is expected to unlock additional EUR 14m financing specifically for small loans to SMEs, to sustain jobs and create new business opportunities in Georgia. This guarantee facility is funded by the European Union (EU) through the Neighbourhood Investment Facility under the EU4Business initiative. The guarantee covers 70% of each loan disbursed by TBC Bank.

2 The EIB also signed a USD 5 million credit line with Credo Bank to support of Georgian micro and small enterprises (MSEs business with less than ten employees) projects, particularly in rural areas. This is EIB s first microfinance investment in Georgia and via Credo bank, the credit line will target micro-entrepreneurs including self-employed individuals, sole-proprietorships and micro-entrepreneur groups with a focus on women beneficiaries. As a part of the EU4Business initiative the operation is partially financed by the Neighbourhood Investment Facility of the European Union. With this EIB s first investment supporting microfinance activities in Georgia, the EU Bank will target borrowers including self-employed individuals, sole-proprietorships and micro-entrepreneur groups with a focus on women beneficiaries ; said Vazil Hudák, EIB Vice-President responsible for operations in Georgia. Certainly, this will improve the access to finance of SMEs in Georgia and thus contribute more to growth and job creation. At the same time, we provide a guarantee which will help to accelerate innovative SMEs and allow them to be more competitive. Carlos Moedas, European Commissioner for Research, Science and Innovation, said: The European Union is committed to boosting innovative SMEs both in its Member States and in the Eastern Partnership countries. The fact that SMEs in Georgia will now benefit from additional 94 million in EU-guaranteed loans is testament to that. Innovation, and especially a strong SME sector, are crucial for economic growth both in Georgia and in the EU. Commenting on the signature, the EIF s Chief Executive, Pier Luigi Gilibert, said: I welcome the signature of these two guarantee agreements in Georgia. TBC Bank is a leading Georgian bank with a strong focus on lending to SMEs and small mid-caps. Today s agreement will enable the Bank to expand its financing activities, benefitting Georgian companies. Vakhtang Butskhrikidze, Director Chief Executive Officer of TBC Bank, said: The signing of the two guarantee agreements mark a significant milestone in our partnership with the European Investment Bank Group. The size and the structure of the products will allow TBC Bank to accelerate financing of Georgian MSME and small midcaps through reducing credit risk. Introduction of guarantee facilities to Georgian financial sector is an important trigger to foster further growth of the economy and support MSME development. We are delighted to continue our successful partnership with EIB and EIF with the introduction of these innovative products and look forward to more transactions in the future. Mr. Zaza Pirtskhelava, Credo s CEO, stated: It is our honour to officially commence partnership with European Investment Bank has been a remarkable year in Credo Bank s history, with the support of our international shareholders, microfinance

3 organization Credo entered banking industry. Focus on micro and small businesses in agriculture sector remains one of our top priorities. Therefore, cooperation with European Investment Bank (EIB) is an important step to further support the development of those businesses and create additional employment capabilities. We look forward to contribute our effort to make the cooperation as valuable as possible. This year the EIB is celebrating ten years anniversary of its operations in Georgia, with a total amount of EUR 1.6bn signed for 21 projects. Georgia is the second most important recipient of EIB funding among the Eastern Partnership countries. The priorities for EIB support in the country are: the strengthening of the local private sector, in particular trade and SME, and the development of social and economic as well as transport and energy infrastructure. Ends About the EIF The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe s micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The European Investment Bank is the long-term lending institution of the European Union owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. About TBC Bank Group TBC PLC is a public limited company registered in England and Wales that was incorporated in February TBC PLC became the parent company of JSC TBC Bank ( TBC Bank ) on 10 August TBC PLC is listed on the London Stock Exchange under the symbol TBCG. TBC Bank, together with its subsidiaries, is the leading universal banking group in Georgia, with a total market share of 38.2% of loans and 38.6% of non-banking deposits as at 30 September 2017, according to the data published by the National Bank of Georgia. About Credo Credo Bank is the leading bank on Georgian microfinance market in terms of

4 countrywide presence and number of clients. It operates 65 Service Centers and supports up to 230 thousand customers across Georgia. The bank s mission is to provide sustainable financial services to micro, small and medium businesses, with a preference for rural activities and those businesses that create income and employment opportunities. Credo Bank is owned by consortium of international shareholders, the social impact investors - Access Microfinance Holding AG (Germany), responsability Investment Management AG (Switzerland) and Triodos Investment Management BV (Netherlands). About InnovFin The InnovFin SME Guarantee Facility is established under the EU InnovFin Finance for Innovators initiative developed under Horizon 2020, the EU Framework Programme for Research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to loan finance for innovative SMEs and small mid-caps (up to 499 employees). The facility is managed by the EIF, and is rolled out through financial intermediaries banks and other financial institutions in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and the EIF against a proportion of their losses incurred on the debt financing covered under the facility. About EU4Business: EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership region (Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine) to realise their full potential and boost economic growth. EU4Business programmes are being implemented by partners such as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) to unlock the huge potential of SMEs in the region, thus boosting economic growth and creating jobs. For more information, visit DCFTA Initiative East Programme The EIB Group joins forces with the European Union under the DCFTA Initiative East Programme aiming to strengthen economic development in the countries which have signed Association Agreements with the EU namely Georgia, Moldova and Ukraine by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by way of enhancing access to finance for SMEs, improving business environment as well as providing advisory services to local businesses. Press contacts: EIF: David Yormesor

5 Tel.: , d.yormesor@eif.org EIB: Dušan Ondrejička, d.ondrejicka@eib.org, tel.: /mob.: Shirin Wheeler s.wheeler@eib.org, tel.: / Mobile: TBC Bank: Tamuna Kirvalidze Tel.: , tkirvalidze@tbcbank.ge Credo Bank: Tamar Badashvili Tel.: , tbadashvili@credo.ge European Commission: Maud Noyon Tel: , maud.noyon@ec.europa.eu Source URL: rt-over-eur-90-million-loans-georgian-smes_en