Ground-breaking International Award for Microfinance Group Crystal
Leading Georgian microfinance company JSC MFO CRYSTAL has been awarded a ground-breaking rating by international credit assessment agency Fitch Ratings. Praising Crystal’s performance, the agency comments on the strength of its business and its solid asset quality, which have won it the first international rating in Georgia’s microfinance industry. This will bring Crystal to the attention of international investors and helps raise the investment profile of the country and the development of the corporate bond market.
Fitch comments that its “B” Stable Outlook rating factors in “Crystal's sound performance to date, reflected in the company's solid asset quality, profitability and capitalization metrics.”
Crystal, which was started 19 years ago, now has over 12% of the microfinance market and services over 70,000 customers from 50 branches spread across the country.
In the press-release published by Reuters news agency, Fitch Ratings said: “The ratings reflect the business focus of Crystal on microfinance (MFO) lending in a high-risk operating environment in Georgia, its rapid recent growth, and market and refinancing risks resulting from the predominance of foreign-currency wholesale funding”.
“This is quite a high assessment for a non-banking financial institution and will position Crystal under the radars of international investors, and will strengthen the country’s investment appeal, allowing the company to make its contribution towards the development of Georgia’s corporate bond market,” said Archil Bakuradze, the company’s Executive Chairman. “Further increases in the credit rating will depend on the enhancement of the legal environment, successful completion of the reforms in microfinance regulation, availability of Georgian Lari refinancing instruments and the continued strengthening in the company”.
One of the limiting factors in ratings for Crystal has been the competition in the Georgian microfinance market, where Crystal is competing with other microfinance groups and the banking sector. However, Fitch observes the “significant” growth performance that Crystal has been generating, on average 53% annually in 2013-16, shows the potential for future rises in the rating.
Katie Ruth Davies