Under the EU4BUSINESS credit line ("DCFTA") Basis bank will be able to finance SMEs who are aiming to upgrade their technology and equipment and align with the EU standards in terms of product quality, health and safety measures and environmental preservation.
The loan will enable Basis to maintain and expand longer-term lending to the good quality private Georgian MSMEs, in the time of pandemic and post crisis, hence complementing other crisis response measures undertaken by the Bank under the COVID-19 Solidarity Package.
ETI score: 75
Competitive: BB will expand its SME portfolio with a focus on financing DCFTA priority investments that result in compliance with at least one EU Directive(s), facilitating Georgian SME's increased competitiveness.
Resilient: The project aims to ensure prudent lending practices and adequate portfolio quality.
JSC Basis Bank ("BB"), Fitch rated (B+) is SME-focused bank ranked 5th by total assets and 6th by loan portfolio among 15 banks in Georgia, with 3.2% and 2.85% respective market shares as of 2Q 2020. BB is majority owned by Hualing Group (unrated) (91.2%) - one of the largest Chinese conglomerates engaged in diversified industries (real estate, foreign trade, livestock, logistics) and geographies. BB serves over 5000 business customers through its 24 branches across the country employing near 550 people.
EBRD Finance Summary
Total Project Cost
Additionality stems from the financing structure of this transaction (longer term and conditions), and innovative structure of the product, that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure. The sub-borrowers will receive advisory services from the Project Consultant on adapting EU directive in the most effective manner.
Environmental and Social Summary
Categorised FI (ESP 2019). Basis Bank (BB) is an existing client of EBRD and has confirmed satisfactory compliance with the requirements of the EBRD's Performance Requirements 2, 4 and 9 through its annual reporting. BB has appropriate staffing and risk management procedures in place to cover the requirements of the DCFTA.
Technical Cooperation and Grant Financing
TC (under DCFTA Programme): EUR 7 million (under Phase 2, for Georgia, Moldova and Ukraine) to finance Project and Verification Consultants activities, i.e. support with the implementation, marketing and monitoring of the Programme and verification of the technical implementation before the incentive payments are released to the Basis Bank's sub-borrowers.
This project was approved in the context of the Bank's response to the COVID-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of the Bank's response to COVID-19, and this deviation, can be found on our website.
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PSD last updated
04 Dec 2020
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