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EBRD and ICDF support micro and small businesses in Georgia
The European Bank for Reconstruction and Development and the International Co-operation and Development Fund, Taipei China have extended a US$3 million loan to Microfinance Bank of Georgia ('MBG'). The transaction aims to help MBG, a specialist bank set up in 1999 to support micro and small enterprises in the country, cope with rapidly rising demand.
The new loan is on top of separate $3 million and $6 million credit lines previously extended by the Bank and an equity investment of $0.5 million representing 10% stake of MBG.
The new loan from ICDF comes via a contribution to the Financial Intermediary Investment Special Fund, established in 1996 to provide funding to financial intermediary operations in the EBRD's countries of operations. The Fund focuses on private-sector operations in countries at an early and intermediate stage of transition where such finance is otherwise scarce. Of ICDF's $12.5 million contribution to the Fund, $2.68 million had previously been committed to projects in Azerbaijan and Lithuania. The ICDF is separately providing $7.5 million to an EBRD SME credit line in Belarus.
In Georgia, MBG now operates through 12 branches and outlets in the Tbilisi, Kutaisi and Batumi regions. Nearly 130 loan officers have been trained through the technical assistance programme supported by the German Development Bank KfW. The bank has disbursed over 11,000 loans worth $60 million, with an average size of around $5,500. It is currently disbursing 1,100 loans each month to micro and small enterprises ranging from market traders to clothing and shoe manufacturers.
Promoting micro and small companies is one of the Bank's top priorities in Georgia and, indeed, across the entire region in which it operates. The EBRD manages long-term MSE financing programmes in 14 countries, helping disburse over 200,000 loans worth approximately $1.3 billion to 150,000 micro- and small- sized businesses.
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