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$6 mln to help Georgian bank make loans to entrepreneurs
Private entrepreneurs in Georgia are set to benefit from a $6 million loan the European Bank for Reconstruction and Development is extending to TBC Bank. The funds will be used to provide small and medium-sized enterprises with medium to long-term finance, for which there is growing demand. Although 80 per cent of Georgia’s GDP is generated in the private sector – mostly from SMEs – the level of bank lending to the sector is still low.
The loan to TBC at this crucial time in Georgia underlines the EBRD’s commitment to the country’s future development, said Noreen Doyle, EBRD First Vice President. The EBRD and TBC have been partners since 1996, when a first $3 million SME credit line enabled TBC to finance 27 Georgian SMEs in various sectors of the economy.
The new facility will mobilise additional funds for entrepreneurs. About 30 new Georgian private enterprises are expected to obtain finance from TBC, with the average loan size roughly $200,000. By offering medium and long-term tenors, for which there is still a significant gap in the market, the EBRD loan will promote private entrepreneurship and help sustain the development of the private sector in Georgia.
TBC was established in 1992 and has been actively cooperating with international financial institutions such as the EBRD since 1996. With a motivated and highly skilled staff, the bank has become Georgia’s market leader in terms of assets. TBC focuses on the corporate sector and SMEs, a segment of the market where it intends to increase its share.
The Georgian banking sector largely consolidated in the mid-1990s, when all state-owned banks were privatised. The EBRD is an important investor in the sector, working with most banks in the country. Across all sectors, the EBRD has committed €176 million to 28 projects in Georgia.
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