The FINANCIAL -- IFC, a member of the World Bank Group, is providing Bank of Georgia, the country’s largest bank, a $90 million long-term loan to help expand access to finance, further diversifying Georgia’s economy and boosting growth.
IFC is providing a 10-year subordinated loan, including $20 million mobilized from the European Fund for Southeast Europe (EFSE), to help expand financial services in Georgia, where banking penetration remains low, and increase the flow of credit to micro, small, and medium enterprises (MSMEs).
“I am pleased to announce the completion of one of the largest debt transactions for Bank of Georgia,” said Irakli Gilauri, Bank of Georgia CEO. “This subordinated loan facility, which qualifies as Tier II Capital under the Basel 2 framework, will improve the overall capitalization of the bank and support our growth without compromising capital ratios. I would like to thank our long-time partner IFC for continuous collaboration.”
The financing will help Bank of Georgia, a long-term IFC partner in the region, expand its already large MSME customer base and encourage growth in its retail banking business. It will also contribute to the bank’s strategic goal of supporting entrepreneurship in Georgia, according to IFC.
“The loan package will help Bank of Georgia finance more smaller businesses, which are a driving force for development but often lack the capital to grow,” said Jan van Bilsen, IFC Regional Manager for the South Caucasus. “This project is yet another step forward in implementing our strategy in Georgia – one pillar of which focuses on mobilizing our partners’ resources to help expand the financial sector, boost access to finance, and reduce poverty.”
Georgia became an IFC member in 1995. Since then, IFC has provided a total of about $665 million in long-term finance, including $272 million mobilized from partners, supporting 51 projects across various sectors. In addition, IFC has supported trade worth more than $292 million through its trade finance program. IFC has also implemented a number of advisory projects focused on private sector development.