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EBRD gives ProCredit Bank Georgia $15 million boost
Micro and small enterprises will benefit from more access to finance
ProCredit Bank Georgia (PCBG) is receiving a $15 million syndicated loan
arranged by the EBRD to help meet the growing needs of local entrepreneurs in
Georgia. The loan is the second loan to be syndicated to a financial
institution in Georgia and will provide PCBG with access to international
capital markets.
EBRD is the lender of record for the full amount and is providing a three-year
A loan using $8 million of its own funds and $2 million of the TaiwanICDF's
contribution to the Financial Intermediary Investment Special Fund. A further
$5 million is being syndicated to Citigroup under the EBRD’s A/B loan
structure.
PCB Georgia is a development oriented full-service bank and market leader for
financing small businesses in Georgia. Established in May 1999, PCB Georgia is
owned by ProCredit Holding, IPC and Commerzbank. The total volume of the
business loan portfolio reached $162 million as of June 2007, and 35.500 in
number, from which almost 96 per cent are micro loans worth less than $20,000.
All loans are provided on a commercial basis.
It is also actively entering the agricultural lending sector through its
growing network of regional branches. It disburses farmer’s loans for the
acquisition of seeds, fertilizers and animals as well as loans for the rural
sector for purchasing agricultural equipment, machinery and land. PCB Georgia
offers loans for the acquisition of seeds, fertilizers and animals as well as
for the purchase of agricultural equipment, machinery and land.
Olivier Descamps, EBRD Business Group Director, said that micro and small
businesses are critical for economic development and increasing employment
opportunities, yet they often lack access to finance. This latest loan
directly supports this dynamic sector in Georgia. “The role entrepreneurs play
in promoting the transition towards a market economy cannot be overstated, and
that is why we pay so much attention to this sector”, he added.
Philipp Pott, General Manager of ProCredit Bank, said: “This syndicated loan
and the increasing diversification of our funding base in general highlight
the growing maturity of the bank. The additional financing will help us to
extend our outreach among small businesses and agricultural clients across the
country. ProCredit Bank’s eight-year track record in Georgia and the maturity
of the institution is the best guarantee our small business clients can have
for the stability of their financial partner.”
Bob Annibale, Global Director of Citi Microfinance said, “Citi is pleased to
have participated in this transaction with EBRD and PCBG. We are now working
with ProCredit group, a global leader in microfinance, in many countries where
we are both present and with this transaction, beyond.”
Georgia is part of the EBRD’s Early Transition Countries Initiative (ETCI),
launched in 2004. The programme aims 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. The initiative is part of an international effort
to address poverty. The Bank will accept higher risk in the projects it
finances in the ETC countries, while still respecting the principles of sound
banking.
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. Across its countries of operations, the EBRD has
committed over $1 billion to 105 financial institutions to facilitate loans to
some 2 million micro and small businesses in the region.
In Georgia the EBRD has supported the establishment of a microfinance lending
programme at 5 leading commercial banks.
As of December 31, 2006, the Bank had signed a total of 72 investment projects
covering energy, transport, agribusiness, general industry and banking for a
total commitment of €398.8 million in Georgia. As at year-end, the Bank’s net
portfolio in the country stood at €265.1 million. Total EBRD commitments in
Georgia have increased to €399 million. Over the past two years the Bank has
almost doubled its portfolio for SME finance and its current pipeline for the
year 2007 is about €40 million. The number of operations signed annually
increased from four in 2003 to 22 in 2006, with nearly all new commitments
made in favour of the private sector.
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