The Asian Development Bank (ADB) is strengthening the banking sector in Georgia by funding a credit line for small and medium sized enterprises. The assistance supports the ADB's overall objective of reducing poverty through sustained economic growth in the Central Asian nation.
ADB is extending a $25 million loan to JSC Bank of Georgia (Bank of Georgia), the country's leading universal bank, which will be used for lending to small and medium sized enterprises. This is ADB's first transaction in Georgia since the country joined the Bank as a member in February 2007.
ADB's loan forms part of a $123.5 million syndication co-arranged by Citibank N.A.(Citi) and ADB, with Citi placing two tranches with maturities of 12 months and 18 months respectively with a consortium of international banks. ADB's tranche of $25 has a maturity of 3 years which increases the attractivity of the transaction to Bank of Georgia and is hoped will help to encourage future longer term capital markets transactions in this market.
“The banking sector in Georgia is growing rapidly but remains small. By providing additional funding to Bank of Georgia to expand its banking operations, ADB will be achieving its first objective under the project, which is to support the emerging banking sector,” said Pamela Bracey, Investment Specialist of ADB's Private Sector Operations Department.
Through the assistance, ADB also hopes to foster Bank of Georgia's small and medium sized enterprises financing operations, which should help expand the sector, a key contributor to poverty reduction. In all of ADB's developing member countries, small and medium sized enterprises have a significant role to play and are often key drivers of economic growth, development and employment creation.
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