TBC Bank Signs GEL 103 mln Loan Agreement with FMO

On 23 October, TBC Bank Group PLC’s subsidiary, JSC TBC Bank ("TBC Bank"), signed a loan agreement to the amount of GEL 103 million with The Netherlands Development Finance Company (FMO).

The five-year loan facility will be used primarily to finance young entrepreneurs running micro, small and medium-size enterprises in Georgia, as well as young retail customers requiring mortgage loans. The local currency funding will be obtained by the FMO through a public placement of bonds on the Georgian Stock Exchange.

The official ceremony of signing the loan agreement was attended by Mamuka Khazaradze, the Chairman of TBC Bank, Badri Japaridze, Deputy Chairman of TBC Bank, other high-level officials from TBC Bank and FMO, and the representatives of the local media.

“Today, we signed a very important agreement with the Netherlands Development Finance Company,” noted Vakhtang Butskhrikidze, CEO of TBC Bank. “The loan facility will be used to finance young Georgian entrepreneurs and to develop the country’s economy. From next year, we will use these financial resources for the economic development of Tbilisi and the regions of Georgia.”

He went on to say that TBC Bank is proud to have had a fruitful partnership with FMO for several years already.

The CEO of TBC Bank also stressed the importance of the loan agreement and elaborated on the benefits it will bring to the economic development of Georgia: “We are proud to have built such a successful relationship with FMO, TBC Bank’s long-standing partner. We started our partnership in 2006 and during these 12 years, FMO has provided more than $350 million in MSME and mortgage loan financing, as well as local currency and subordinated loans.

“Local currency funding is of great importance for the Georgian financial sector as it allows us to supply financing for the increasingly high demand in local currency loans and enables us to further strengthen the Bank’s leading position in the MSME segment. In addition, a public placement of bonds will further support local capital market development in Georgia. This transaction reflects both institutions’ commitment to continued cooperation and we look forward to more years of productive partnership,” he added.

According to the FMO’s Chief Executive Officer, Peter van Mierlo, this new transaction is important for both sides, as it will enable TBC Bank to reduce inequality and support financial inclusion in Georgia, particularly among young entrepreneurs, as now they will have access to financial services.

“This is an important contribution to stimulating job creation in Georgia,” van Mierlo told reporters.

FMO’s Chief Executive Officer summarized the company’s collaboration with TBC Bank and noted that this is a very strong relationship based on mutual trust and understanding. Van Mierlo also marked the country’s future prospects to become the regional economic leader and stressed the importance of the role Georgia plays in the global economy.

“FMO is proud to continue its long-standing and successful relationship with TBC Bank in Georgia. We have been operating in this country for at least 15 years and we have been actively collaborating with TBC Bank during this time. Being in our industry, it is about trust and the things we want to achieve together. This is my first visit to Georgia and I am highly impressed with this country. This country obviously has a role to play as an economy that is growing into the new world. The ambition of Georgia to be the regional leader is quite remarkable. This region needs a leader. I am from Netherlands and we have always been a small country, but we have also tried to lead some other countries, which are bigger, in the right direction. And I think this is the role that Georgia could play. It is about financial inclusiveness, it is about growing into the global economy, which will be different in the future and as a result, the role of Georgia will become more and more important,” he elaborated.

FMO supports sustainable private sector growth in developing and emerging markets, focusing on three sectors that have high development impact: financial institutions, energy, and agribusiness, and food and water. With an investment portfolio of EUR 9.2 billion, FMO is one of the largest European bilateral private sector development banks.

By Ana Dumbadze