ADB $50m to help Ge­or­gia re­store con­fi­dence in banks

The Pak Banker - - Front Page -

MANILA: The Asian Devel­op­ment Bank (ADB) and the Joint Stock Com­pany Bank of Ge­or­gia have signed a loan agree­ment for a $50 mil­lion five-year fi­nanc­ing pack­age, the pro­ceeds of which will be on­lent to small and medium-sized en­ter­prises (SMEs). The loan is ex­pected to help Ge­or­gia ex­pand its SME sec­tor, as well as re­store con­fi­dence in banks in the wake of the global fi­nan­cial cri­sis and war in 2008.

"The devel­op­ment of small and medium-sized en­ter­prises is cru­cial for the re­cov­ery of the econ­omy in the af­ter­math of the war and global eco­nomic down­turn, and this as­sis­tance will al­low the bank to ex­pand its loan port­fo­lio to small busi­nesses," said Philip Erquiaga, Di­rec­tor Gen­eral of ADB's Pri­vate Sec­tor Op­er­a­tions Depart­ment. In 2008 and 2009, bank lend­ing largely came to a halt as funds from cap­i­tal mar­kets and for­eign in­vest­ment dried up, and the re­turn of bank lend­ing has only re­sumed this year. ADB's as­sis­tance will help the sec­tor con­tinue to re­cover and pro­vide badly-needed credit to smaller busi­nesses, which are key driv­ers of em­ploy­ment, eco­nomic growth and devel­op­ment. While an im­por­tant com­po­nent of on­go­ing eco­nomic growth, SMEs in Ge­or­gia em­ploy less than 40% of the coun­try's to­tal la­bor force. The in­abil­ity of SMEs to read­ily ac­cess fi­nance has been a stum­bling block to their devel­op­ment and fur­ther ex­pan­sion of the pri­vate sec­tor.

With its strong track record and na­tion­wide branch net­work, Bank of Ge­or­gia, the lead­ing uni­ver­sal bank in the coun­try is well placed to ef­fec­tively uti­lize this as­sis­tance. ADB's sup­port for the bank­ing sys­tem and broader Ge­or­gian econ­omy is also ex­pected to en­cour­age the re­turn of for­eign in­vest­ment to the coun­try. -PB News

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