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EBRD and Constanta Foundation boost Georgia’s micro enterprises
Micro finance institution receives $3.5 million credit line
The EBRD is extending a $3.5 million credit line to Georgia’s Constanta
Foundation to support its lending to local micro and small enterprises.
Constanta Foundation, established in the late 1997, is one of the leading
non-bank micro finance institutions in Georgia. The credit line will be partly
cofinanced by BP’s and its co-venturers' RDI (Regional Development Initiative)
special fund.
“Supporting SME development is a top priority for BP and its partners in
Georgia. We have already worked extensively with Constanta Foundation in the
past and through this new initiative with EBRD, part of our Regional
Development Initiative, we hope to help Georgia to maintain its rapid progress
in social and economic development,” said David Glendinning, Communications
and External Affairs Manager of BP Georgia.
With its network of 19 representative offices, Constanta covers seven
different regions of Georgia, including several locations where no other
organisation lends to MSEs. With an average loan size of under $500, the
company targets the lower end of the microfinance market, thus creating more
opportunities for the smallest borrowers in Georgia’s rural areas. The EBRD
credit line provides an opportunity for Constanta to expand these operations.
The potential market for micro lending in rural Georgia is large, said Michael
Davey, EBRD Director for the Caucasus. Despite growing competition between
banks, it continues to remain the most under-served market segment. The loan
to Constanta Foundation will thus improve access of these enterprises to
finance and promote competition between other micro finance institutions as
well as commercial banks.
The credit line comes under the EBRD’s Early Transition Countries initiative,
which was launched in 2004 to stimulate market activity in the Bank’s
lowest-income countries of operations by using a streamlined approach to
financing more and smaller projects, mobilising more investment, and
encouraging economic reform. In Georgia the EBRD to-date has invested about
€390 million in 64 projects across the country.
Through its micro and small enterprises programmes the EBRD has supported over
one million small enterprises throughout eastern Europe, Russia, Central Asia
and the Caucasus. The EBRD has worked with 84 commercial banks and non-bank
microfinance institutions to establish or expand specialised micro and small
business finance units and these partner institutions have lent $10.6 billion
in loans to micro and small businesses in the region.
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