New financial venture launches in Kutaisi

A new financial institution, GeoCapital, has been launched in Kutaisi. The Messenger spoke with Ralph Burleson, one of its managers.

Why did you decide to open your main branch in Kutaisi? It has only about 300 000 people.

GeoCapital chose to locate our central branch in Kutaisi because we are focused on the entirety of Georgia - not only Tbilisi.

Kutaisi is in the geographical center of the country. As we expand beyond our first few locations, locating senior management in Kutaisi makes it easier to manage future locations in cities like Batumi, Poti, Zugdidi, and Zestaponi.

The regional economy of Imereti is well positioned for fast expansion during the next five years. Free enterprise zones, Parliament and a soon-to-be-opened airport will help fuel the fires of economic expansion in the area. Choosing Kutaisi for our central branch places GeoCapital squarely in the middle of this coming transformation.

Because foreign business have not fully discovered the benefits of locating in Imereti, Kutaisi is home to the best untapped labour market in Georgia. Centralizing administration services here gives us a competitive advantage in labour cost and skill, allowing us to deliver better services to our clients at competitive rates.

Kutaisi's smaller size (and less traffic) makes operational logistics easier. GeoCapital is tightly integrated with Georgia's Notario and Reestri services. Having easy, physical access to these institutions saves us time and money, allowing us to give better service and rates to our borrowers.

What is you target market, and who will you finance and under what conditions?

GeoCapital serves our community with both lending services and learning services. Our "target market" for these offerings loosely overlaps. A client does not have to take our free classes to be approved for a loan, and a client is not required to take a loan to enroll in a free class.

On the "learning" side, our target market includes individuals who want to increase their financial literacy. People across Georgia are very well educated in areas like literature, music, and engineering. However, many have not been taught crucial information about personal finance and the best way to use money to create a better life. In addition to personal finance, we will also offer classes on small business finance for individuals wanting to start or expand a small company.

On the "lending" side, GeoCapital offers loans for any purpose. These loans are secured by collateral – like houses, cars, or gold. Our target market is people who do not qualify for loans from a traditional bank, and without GeoCapital would be forced to borrow money at very high rates from local "neighbourhood" lenders.

Who are the founders and shareholders of the company?

The company was founded and is owned by a team of locally based Americans and Georgians. These people include, Ralph Burleson, Irma Svanadze, Mark Mullen and Natalia Svanadze.

What kind of experience has the company in this field?

The GeoCapital leadership team has experience in Georgian banking with our newest director, Irma Mazurok, having come to GeoCapital after a successful management career at TBC. We have experience in logistics and financial technology systems, with [myself] coming from Microsoft and Accenture. We also have a strong formal education background. Our general director, Irma Svanadze, has advanced degrees and teaching experience from Western European and US universities. Rounding out our team on the finance side, Daan Harmsen is a Harvard graduate with deep financial education and direct work experience in large international finance concerns like Deutsche Bank.

What are your essential capital assets?

Currently, we have about $2 million USD loaned to the local community. We plan to bring in an additional $5 million in the coming months from international sources both private and institutional.

Do you plan to expend your activities into other regions in Georgia and in which sequence?

By the end of summer 2012, we plan to expand our physical locations to other areas in Imereti. By early 2013, we will have branches operating in Tbilisi and Batumi as well.