The European Investment Bank (EIB) has agreed to lend €30 million to TBC Bank, the largest bank in Georgia, in order to broaden the access to finance of Georgian small and medium-sized enterprises (SMEs), which represent more than 90% of companies active in the country. The EIB funds will be provided in the framework of the European Union’s EU4Business initiative, designed to support SMEs in the six Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). Around 600 Georgian SMEs are expected to benefit from the loan.
Speaking at the signature event, EIB Vice-President Vazil Hudák said: “Thanks to the EIB support, Georgian SMEs will improve their access to longer term finance, which is a prerequisite for their growth and competitiveness. Our fourth loan with TBC Bank is expected to support the development of approximately 600 small and medium size companies, by giving them better access to finance. We hope this will promote job creation and foster the general development of Georgia’s economy”.
The CEO of TBC Bank, Vakhtang Butskhrikidze, said the funding would strengthen their support to SMEs:“We are proud to have built such a successful relationship with the EIB, TBC Bank’s long standing partner. This is already the fourth transaction we have successfully accomplished since the launch of our partnership in 2012, which is a testament to the truly efficient working relationship our respective organisations have formed. This facility will help TBC Bank to further strengthen its leading position in the Georgian small and medium-sized enterprises (SME) segment.”
This is the fourth EIB Group operation with TBC Bank and builds upon the fruitful cooperation of the EU bank with this Georgian institution. Since 2011, TBC Bank has on-lent EIB funds for SMEs totalling €85m.
Additional financing for small businesses
The EIB loan can be combined with portfolio guarantees supporting SMEs which were extended to TBC Bank last year through two instruments also promoted under the EU4Business Initiative: the InnovFin portfolio guarantee, supporting innovative SMEs, and the DCFTA Initiative East portfolio guarantee, unlocking additional financing for small businesses. The overall objective is to allow TBC Bank to extend financing on favourable terms to a broader group of small and medium-sized companies that would otherwise have limited access to the bank’s lending.
In these operations, the EIB has joined forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.
The EIB also signed a €3.25 million grant agreement with the Georgian Ministry of Regional Development and the Georgian water utility company, the United Water Supply Company of Georgia. These funds will be used for the financing of specialised professional services to support the utility in the implementation of the EIB Kutaisi Waste Water project.
The EIB and EU4Business
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of EU Member States. It makes long-term finance available for sound investments in order to contribute towards EU policy goals. The aim of the InnovFin SME Guaranteeis to encourage banks or other financial institutions to lend to SMEs and small mid-caps (up to 499 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support.
The EIB Group has joined forces with the European Union under the Deep and Comprehensive Free Trade Agreement (DCFTA) Initiative East Programmeaiming to strengthen economic development in the countries which have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries.
EU4Business helps SMEs in the Eastern Partnership countries to finance their development and boost economic growth. EU4Business support is delivered by the EIB together with other organisations outside the EU such as the European Bank for Reconstruction and Development. All EU activities that support SMEs in the Eastern Partnership countries are part of EU4Business. The EIB has joined forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries.