The European Investment Bank (EIB) has loaned €50m to the Bank of Georgia to enable financing for small and medium sized enterprises (SMEs) in the region.
This is the second loan issued by the EIB to the Bank of Georgia; and the resulting finance capacity is expected to support the creation of around 4,050 new jobs. In the first local currency transaction conducted by the EIB in Georgia, the bank issued a portion of its loan in the Georgian lari in order to avert the risks posed by shifting exchange rates; thereby improving the ability of businesses and SMEs in Georgia to access long term financing options.
EIB Vice President Lilyana Pavlova said: “Support for economic development and smart, sustainable and inclusive growth is a key priority of the EU’s work with Georgia. As the EU bank, we are committed to supporting small and medium sized businesses – but we need the help of local partners to do so. I am therefore happy that we are extending our cooperation with a strong existing partner of the EIB and that we are reaching out to new institutions as well. SMEs play a significant role in Georgia’s economy and our transactions will pave the way for better business prospects for those companies and the country in general.”
Since the EIB began to offer loans in Georgia in 2010, the bank has lent Georgian banks and businesses €1.9bn to support projects renovating local infrastructure, stimulating development within the private sector and improving living conditions for Georgia’s residents.
Ivane Matchavariani, Georgian Minister of Finance, said: “We are extremely glad to observe the expansion of EIB portfolio in the private sector. Private sector-led growth is the only suitable growth model for Georgia. Therefore, I am pleased to see EIB private sector initiatives coinciding with government priorities. Our growth model has a particular focus on SME sector development. We want to make the SME sector an important growth driver and tap its potential to support the sustainability, inclusivity and robustness of the country’s economic development. We are glad to see the EIB’s first local currency operation in Georgia. This provides very important support for the country’s dedollarisation policies. I would like to thank the EIB and the private partners represented in these operations for the work done and I hope to see more intensified cooperation between the EIB and the Georgian private sector.”