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EBRD financing supports Georgia's micro and small enterprises
A US$ 3 million (EUR 3.1 million) loan to Microfinance Bank of Georgia (MBG) from the European Bank for Reconstruction and Development (EBRD) will encourage the development of micro and small enterprises (MSEs) in Georgia’s private sector. MBG is a joint-stock company specialising in lending to this sector.
"The growth of the MSE sector in Georgia will help to advance the transition by supporting entrepreneurship at the grass roots level," said Kurt Geiger, Business Group Director for Financial Institutions, at the signing ceremony in Tbilisi. "MBG is designed to bridge the gap between supply and demand for financial services for MSEs. The bank’s initial results show that it is possible to bring a large number of micro and small entrepreneurs into the formal banking system by offering suitable financing. The EBRD’s loan will complement other facilities offered to Georgian banks for on-lending to MSEs."
MBG is led by the German-Georgian Foundation for the Promotion of Private Sector Development, which owns 31 per cent of the capital. The remaining shares are held by International Finance Corporation (20 per cent), TBC Bank (19.6 per cent), Nederlandse Financierings Maatschappij voor Ontwikkelingslanded N.V. (12 per cent), International Micro Investitionen AG (12 per cent) and three Georgian banks with a total of 5.4 per cent.
MBG received its commercial banking licence in May 1999 and started operations in Tbilisi. It is scheduled to open a branch in Kutaisi in April. Almost 700 loans totalling US$ 5.5 million (EUR 5.7 million) have been disbursed to MSEs since it began operating. MBG is expected to promote local competition and encourage other banks operating in Georgia to develop their operations in the MSE sector.
The EBRD is committed to the development of the MSE sector in its countries of operation and is already supporting microfinance banks in Bosnia, Albania, Russia and Ukraine.
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