The European Investment Bank (EIB), the EU bank, is lending EUR 50m to Bank of Georgia, financing projects implemented by small and medium-sized companies (SMEs) in the country. This first EIB transaction – partly using the Georgian lari – will improve the access of Georgia’s businesses to long-term financing by avoiding exchange rate risk.
The local currency solution is supported by the Neighbourhood Investment Facility of the European Union. The operation is expected to support some 4 050 full time jobs. It is the second EIB loan to the Bank of Georgia, one of the largest banks in the country.
Another EUR 15m EIB loan is going to Liberty Bank, the first financial partner institution backed under a EUR 25m initiative for smaller intermediaries with the potential to reach out to SME clients that are currently not adequately served. The entire initiative will support some 3 750 full time jobs. Liberty Bank will also receive technical assistance to improve its SME lending practices and product offers under the Eastern Partnership Technical Assistance Trust Fund.
Both operations are being implemented under the EU4Business Initiative. As part of this initiative, the EIB Group arranged the interactive seminar “From Access to Finance towards Inclusive Growth”. The seminar discussed how to increase access to finance for Georgian SMEs and demonstrated the impact such SME support has on inclusive growth. The seminar was informed by the latest findings of an EIB study on “Access to Finance and SME finance in Georgia”, which was based on an EIB Bank Lending Survey.
“Support for economic development and smart, sustainable and inclusive growth is a key priority of the EU’s work with Georgia,” said EIB Vice-President Lilyana Pavlova. “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.”
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