The EBRD’s Georgian Agricultural Finance Facility (GAFF) helps to provide better financing to local agribusiness.
When Ivane Tetreishvili started up his chicken farm in 2010 in the Georgian district of Gori he had built the business with his own savings.
After a promising start, however, he needed a loan in order to expand the farm’s operations. Ivane’s plan was to build an additional hen-house and to grow his own corn to feed the poultry.
Thanks to a GEL 27 000 loan (about €13,000) offered by ProCredit Bank under the Georgian Agricultural Finance Facility (GAFF), Ivane’s plan is now reality. The farm now rears 9,000 birds. Four employees work permanently on the farm, with five more people hired at busy times.
Loan approved
Ivane is especially satisfied with the loan’s conditions which were exactly tailored to his business. ProCredit Bank is just one of the four banks currently participating in GAFF. It is a €40 million facility which is available in local currency. GAFF contributes to the development of sustainable agri-lending and the strengthening of agricultural value chains in Georgia, in cooperation with KfW who provide additional credit lines to microfinance organisations to onlend to small farmers and agribusinesses.
Focus on agribusiness’ potential
The Georgian agribusiness sector, which before 1991 was able to provide around 10 per cent of the Soviet Union's food supplies, is regaining momentum also thanks to the government’s development agenda which focuses on increasing private sector involvement, infrastructure upgrading and food security.
GAFF is supporting these efforts by providing much needed finance to small and medium size agribusiness companies, as well as supporting local banks to develop skills and procedures suited to agri-lending, diversify loan portfolios and restart lending to the real economy in the aftermath of the August 2008 conflict and global financial crisis.
The facility is accompanied by technical assistance funded by the EU Neighbourhood Investment Facility (NIF) to introduce sound agri-lending and risk management to participating banks.
Thanks to GAFF and ProCredit Bank, Ivane is already working out not only his next business development but also his personal version of the chicken and the egg dilemma. All he needs is another smart loan and a chick incubator.
