EFSE and TBC Bank boost local currency financing for MSEs and households in Georgia
Partners promote responsible financing as key to sustainable development
Luxembourg and Tbilisi, 11 October 2019 – The European Fund for Southeast Europe (EFSE) and long-time strategic partner TBC Bank have increased access to local currency financing for micro and small enterprises (MSEs) and private households in Georgia by the equivalent of more than EUR 23 million.
In a signing ceremony celebrating “The Power of Local Currency Financing” in Chișinău, Moldova, on 10 October, the partners confirmed EFSE’s provision of three loans in local currency to TBC Bank: Two facilities totalling the equivalent of nearly EUR 17 million will be on-lent by the bank to Georgian homeowners to improve living conditions for private households, while the equivalent of EUR 6.4 million will be invested in MSEs to support local business growth.
By enabling borrowers to finance their future prospects using loans in local currency, the partners aim to promote sustainable development in Georgia by protecting business owners and households from direct exposure to exchange rate risk. The ongoing collaboration between TBC Bank and the international impact investment fund EFSE will also enable the bank to further de-dollarize its portfolio, thus safeguarding the institution’s ability to continue serving as a key provider of responsible financing for the important MSE sector as well as for private households.
EFSE Board Chairman Christoph Tiskens said: “TBC Bank and EFSE have long enjoyed a fruitful, strategic partnership in pursuing our joint goal of expanding access to sustainable financing in Georgia. We believe it is important not only to provide entrepreneurs and homeowners with the resources they need to thrive, but to make these resources available in the same currency with which people conduct their business and personal finances. This is how we invest in secure growth and prosperity in the long term.”
Vakhtang Butskhrikidze, CEO of TBC Bank, commented: “We are proud to have built a successful partnership with EFSE. Local currency funding is of great importance for the Georgian financial sector as it enables us to provide loans in local currency to further support de-dollarization of TBC Bank’s balance sheet. Loans in local currency are increasingly in demand from our customers and will enable TBC Bank to further strengthen its position in the SME and retail segment.”
EFSE is ramping up its local currency lending activities in the European Eastern Neighbourhood Region thanks to a new capital layer in the fund’s structure designed to absorb exchange rate risk. This financing instrument was made possible by contributions from the European Union’s “EU4Business” initiative, as well as from the German Federal Ministry for Economic Cooperation and Development.
One of the largest development finance funds worldwide, the European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region by investing in the success of micro and small enterprises as well as improved living conditions for private households. As access to financial services is key to developing this segment, EFSE focuses on helping local financial sectors strengthen their ability to provide responsible financing for this target group. Alongside its investment activities through local partners, EFSE multiplies its impact through the EFSE Development Facility, which provides technical assistance, training, and other nonfinancial support to entrepreneurs and institutions.
EFSE was initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. As the first public-private partnership of its kind, EFSE draws its capital from donor agencies, international financial institutions, and private institutional investors.
Finance in Motion GmbH, Germany, serves as EFSE’s advisor and Hauck & Aufhäuser Fund Services S.A., Luxembourg, acts as manager.
For more information on the European Fund for Southeast Europe, please visit: www.efse.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com
About TBC Bank
TBC Bank Group PLC is a public limited company registered in England and Wales that was incorporated in February 2016. TBC Bank Group PLC became the parent company of JSC TBC Bank (“TBC Bank”) on 10 August 2016. TBC Bank Group PLC is listed on the London Stock Exchange under the symbol TBCG. TBC Bank, together with its subsidiaries, is the leading universal banking group in Georgia, with a total market share of 38.4% of loans and 38.9% of non-banking deposits as at 31 August 2019, according to data published by the National Bank of Georgia.
Media contact EFSE
Senior Officer, Marketing & Communications
Phone: +49 (0)69 271 035-470
Media contact TBC Bank
Business Support Projects Manager
Phone: +995 555 55 33 34
Finance in Motion GmbH Sylvia Wisniwski Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany