People’s Bank invests GEL 10 000 000 in Georgian Agriculture

People’s Bank invests GEL 10 000 000 in Georgian Agriculture

The FINANCIAL -- People’s Bank, one of the leading banks in Georgia, maintaining the highest number of branches and clients, is launching the innovative project “People’s Farmer” targeted at the stimulation of agriculture through lending to household farmers.

The project envisages development of the market for agricultural products, establishment of contacts with processing or exporter companies, an increase of the number of employees within the sector and encouragement of farmers’ initiative in Georgia. 

“This will be an unprecedented project. We have invited all our partner international financial institutions to join efforts in implementing this project successfully and contributing to the development of Georgian agriculture, in the most efficient way possible,” declared Giorgi Goguadze, General Director of People’s Bank, at a conference held at the Hotel Sheraton Metekhi Palace on November 30.


Organized and supported by Peoples Bank, the Georgian Employers’ Association, USAID and CHF-Georgia -non-profit organization, the conference was concerning the development of agriculture in Georgia and support of farmers. However the main event of the conference was the presentation of the project “Peoples farmer.”
“Questionnaires for farmers will be available at every branch of People’s Bank. The questionnaires will be evaluated and potentially successful projects will be considered. Following these steps a consulting service will be offered to the farmers, and loans will be issued. What is more, we guarantee to provide a sales market. Effective monitoring of the project is also extremely important.”

According to the statistics presented by Peoples Bank, the share of agriculture in GDP is only 10.1% in 2007. Main imported agricultural products include wheat, flour, meat and dairy, potatoes, onions and tomatoes. Import in agriculture exceeds export 4 times. The main exported products include nuts, wine and alcoholic beverages, and citrus.

“People’s Bank always considered agriculture one of the priority sectors. We were the initiators of agro-lending in the Adjara region, People’s Bank issued a community initiative, according to the Memorandum of Agreement between People’s Bank and USAID supported CHF project. We implemented the farmers lending program based on a Memorandum of Cooperation between People’s Bank and JSC “Delidor,” said Goguadze. “The experience we have gained while implementing these projects will be extremely beneficial for the successful completion of “Peoples Farmer,” which is much more voluminous and therefore bears greater importance. This project will bring about considerable advantages for the population. More of the rural population will be employed, experience in the agricultural sector will be developed, guaranteed sale of the products will be supported, credits in agriculture will become available, and it is noteworthy that insurance company People’s Insurance will insure against harvest risk.”

Standard agro-loans for farmers will range from GEL 1 000 to 30 000, with an annual interest rate of 14-16% and maturity of 1-12 months.

Business agro-loans for companies will vary from GEL 30 000 to 200 000, with an annual interest rate of 14-16% and maturity of 1 month - 5years.

“Though the conditions are already quite reasonable and friendly, we are still hoping to decrease the interest rate and prolong the maturity with the support of our international partners.
According to Goguadze the bank has issued GEL 10 million for credit resources of the project while he hopes financial support from international partners will be substantial.

“Advantages for the state are also apparent: Job creation, agriculture sector development, popularization of agriculture, the improving of living standards for the rural population and increasing of tax revenues.”

The average volume of loans is expected to be GEL 20 000, the number of projects financed - more than 500. Providing that the project will be successfully completed 5 000 persons are expected to be employed, GEL 25 000 000 of income generated and 3 000 ha. of lands cultivated.

“The financial institution, supporting the development of agriculture, as well as development of other economic sectors, is a very positive fact and the government of Georgia most definitely approves such initiatives. We think this project will bring about visible benefits to the well being of Georgian farmers and affect Georgian agriculture in the most favourable way,” said Bakur Kvezereli, First Deputy Minister of the Ministry of Agriculture.

“This project serves not only the commercial interest of the bank but national interest of the country as well. There is no need to teach Georgians how to nurture land and gather harvest, because they have this talent and knowledge genetically, but they need to be taught how to manage finances, and make efficient use of credit. The project serves this need, making it much more valuable. I am most assured that it will very effective,” said Zurab Gvasalia, President of the Association of Banks of Georgia.





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