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ADB to Help Extend Credit to Rural Regions and Small Businesses in Georgia

Monday, January 21
On 14 January 2013 the Asian Development Bank (ADB) approved a loan to TBC Bank to promote financial sector growth and diversify financial services in Georgia.

This is ADB’s first loan dedicated to Georgia’s underserved rural regions where poverty is widespread. Half of Georgians live in the isolated rural economy, which currently receives only 20% of bank credit.

TBC Bank will provide loans to small- and medium-sized enterprises (SME) and use its microfinance subsidiary Bank Constanta, for lending to micro-entrepreneurs in rural Georgia. In addition to the $50 million loan ADB will provide technical assistance to enhance TBC Bank’s service delivery to its rural SME clients.

“ADB’s support provides access to finance in underserved regions and the poor, while promoting risk diversification and stability of Georgia’s systematically important banks”, says Rainer Hartel of ADB’s Private Sector Department.

As part of the support package ADB will also provide a technical assistance grant to help the National Bank of Georgia to introduce Basel II regulatory risk-based standards for systemically important banks, including TBC Bank. The assistance package will tap into the large potential for growth of economic activity and employment in agriculture, tourism, as well as construction and services in rural Georgia.

This loan will be the third loan to Georgia’s banking sector. It underscores ADB’s commitment to strengthening the outreach, depth and resilience of Georgia’s financial sector and providing banking services and capital to help Georgia’s underserved rural micro, small and medium sized businesses grow. Promoting competition among the banks and reaching out to underserved customers is essential to make financial services more inclusive for Georgians.

Since 2007, ADB has approved more than $1.1 billion in financing operations for Georgia of which $163 million through direct financing of the private sector.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members -- 48 from the region. In 2011, ADB approvals including cofinancing totaled $21.7 billion.