| Cartu Bank to receive extra USD20 million from EBRD |
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09/02/2009 12:04 (1097 Day 12:54 minutes ago) | |||||
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The FINANCIAL -- CARTU Bank will likely receive extra funding from the European Bank for Reconstruction and Development. USD 20 million is planned to be granted for two new projects that are now passed for final review.
New funds will be used to provide medium- to long-term financing to Georgian private companies, clients of Cartu Bank, to meet their requirements for larger loans.
The operation will support the client’s business diversification strategy across Georgia and help to enhance its competitive position in the market.
The transition impact of this equity investment will mainly arise from institutional development of the bank through changes in corporate governance, strategy and business development, operations and risk management systems, EBRD says.
“In addition, this investment will strengthen Cartu’s capital base thereby enhancing the ability of the bank to further expand its market share in Tbilisi and the regions and hence facilitate the competition in the banking sector as a whole. Via the MCFF and SME facilities, EBRD’s support of Cartu will add to the overall lending capability of the banking sector in Georgia thereby increasing financial intermediation. The proposed loans will increase the supply of funding to SMEs thereby increasing access to bank finance”.
Cartu Bank is the sixth largest bank by assets in Georgia with total assets of USD 373 million and equity of USD 64 million, as of end of 2008.
Total cost of the project EUR 32.1 million.
Second project is oriented on SME loans. They will assist the client to further develop its SME lending activities and expand access to finance for local SMEs, which continue to be under-served. The operation will support the client’s business diversification strategy across Georgia and help to enhance its competitive position in the market, EBRD said.
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