Banking Business Results in Imereti Region and Kutaisi City

Rezo RobaKiDZe

Local economy crediting by commercial banks (“Bank of Georgia”, “TBC Bank”, “Pro Credit Bank”, “People`s Bank”, bank “Cartu”, “VTB”, “Standard Bank” “Tao Bank”, and bank “Republic”) acting in Imereti region, faced high rate crediting in the first half of 2007.

At the fist half of the current year, released loans included 77,7 million GEL, what is 58% higher then released credits number (1 million GEL) at the same period of 2006. According to dates, the regions occupies 2,2% segment of bank loans of whole country. In Imereti region 155 Lari has been released on each individual, during six month period, but the number included 98 Lari, at the same period of the recent year, but in Kutaisi the number includes 437 Lari. Crediting environment and inculcation of new banking products improve in conjunction with loans increasing.
It` s incredible, that expect Kutaisi, other districts of Imereti faced 5 times grow volume of released loans relatively with the recent years. We believe assimilation of this segment in the regions will be absolutely possible in several years.
Basic floats of credit resources, in the regions directed to trade- service and physicals crediting, what accordingly consisted 35% of gross loans (27,1 million GEL), and 51% (39,36 million GEL), (check table No:1).
The enterprise was credited with 1,367 GEL at the first and second quarters of the recent year, but 2,148 million GEL was released this year, (57% increase). This date was not unexpected for us, because monitoring of the region`s second quarter appoint on most positive results concerning banking sector and crediting environment issue. Following was basically credited in manufactory:
– Stone treating small enterprises acting in Imereti;
– Special tiles producing enterprises for roads and side –walks covering;
– Food producing individual entrepreneurs;
– Small sewing workshops and shoes producing individual entrepreneurs.
Crediting generation indicator of transport remains on its high level (92%), what is obviously felt in Kutaisi and Imereti.
During the first and the second quarter of 2007 loans service improved, overdue reduced with 62%, what is confirmed by our materials concerning banking statistics. Overdue of gross loans volume included 0,4%, while the number included 1,6% in the recent year. All these appoints on banking sector business improvement, obviously felt in the recent years.
I would like to outline increasing of crediting volumes in the sphere of agriculture, where the reserves much higher. More and more entrepreneurs attempt starting agriculture business. Industry of green is developing already in eleven villages of Tskhaltubo district, 5500 small and middle farmers grow about 5000 tones of green and provides import of 25 million GEL cost production. Despite of Russia`s blockade, entrepreneurs found out new ways and markets in Belorussia, Ukraine and Poland. Agro sector is slowly developing in regions, but it may rise Bank`s interests towards the sphere. For instance, agro sector representatives informed commercial banks about the first and the second quarters of 2007, and the dates faced crediting increase with 310% relatively with same period of the recent year. Banks, and especially Kutaisi branch of “Pro Credit Bank” and micro finance organizations of the region started long term and small loans, as well as long term credits releasing on peasants, and most of them are already owners of private farms, including 4-5 capital green-houses, working during the whole year, giving harvest of green in winter and cucumbers and tomatoes in summer. That`s why prices are rather low in Kutaisi agrarian market then in Tbilisi and other regions. Besides, released credits on 300 families, by micro finance organizations, just in one village, employed 1200 people during one year period and many were prevented form migrating. Banks should take care about new service-centers founding in the region.
Long term credit percentage increase maintains economy and enterprises development in Imereti region. Long term credits volume approached 53%, what is 53,6% increase.
Solid development of banking business in the regions is maintained by gross deposits volume increase maintained by gross deposits number increasing at acting commercial banks branches. It`s volume increased with 110% and included GEL 72,4 million. Imereti region faces 3% segment, long term deposit volume increased with 55%. It appoints on confidence quality increasing towards banks. National currency deposits faced 180% increase relatively with concerning period of 2006. But dollarization coefficient reduced and included 45%. (check scheme No:2); Dollarization coefficient of physical deposits included 76%.
Money transferee from abroad to Kutaisi and Imereti region bank branches bearing huge importance. (check scheme No:3).
The first: transferred money volume included GEL 117 million, – about USD 70 million, what is 20% of transferred money to Georgia.
The second: relatively to the same period of the recent year money transfer volume rose with 40%. It`s increasable that money transfer to Imereti region bank branches three times increased and included GEL 21,5 million.
The third: we could un-cipher geography of transfers, what showed us that the 2/3 of remittances come on Russia.
We would like to make reference on one of the positive result of the money transfer: they bring profits as for immigrants and families, so for our countries and regions. Based on banking statistic and economy monitoring materials, we see how the effectively the money had been invested in real estate and private constructing. It also maintained active constructing providing.
I would like make reference on one observation: money transfer number included GEL 117 million during 6 month period. During this period, foreign currency purchased form the population by regional banks totally including GEL 84 million.
While banking statistics studying of the recent year we decided to learn out inculcation in the regions such services as ATM and plastic cards. As it turned out ATM used by Kutaisi, Samtredia, Zestaponi, Sachkhere, Chiatura, Tkhibuli, Khaltubo residents. Plastic cards owners number 12-times increased in the regions and approached 103,5 thousand, what is 6,8% of entire Georgia. According to our dates, the service is basically used by central and local budget financed organizations, also separate corporative clients. In October, “People`s Bank” started process of region`s pensioners transmitting to plastic cards service, and the service will become wider in up-coming future. But the main is the service inculcation maintained annulling of long rows to the banks. Number of plastic cards will gradually increase and banking operations provided with the plastic cards will climb up. Volume of provided operations during six month period of 2007 included GEL 88 thousands.
Economy monitoring and banking sector business studying is regularly provided. Imereti region faces serious perspectives concerning separate economic directions inculcating. We believe, that such sort of sectors inculcating will maintain economy development of the region and economy sectors fast generation.
Banking Business and Economy Condition in Zestaponi Region
Two bank instances act in Zestaponi region: People`s Bank branch and Bank of Georgia service center. Zestaponi occupies the second place after Kutaisi concerning banking highlights issue. Bank of Georgia service-center opening maintained its success.
1. According to 2007 dates, the region` s banks released 3,95 million GEL loans, what is 33% (12,05 million GEL) released by 18 bank instances acting in Imereti region.
2. Zestaponi is third large district after Kutaisi and Samtredia, in receiving money transferees. In the first half of 2007 total amount of transferred money to Zestaponi banks included 5,685 million GEL, 2% of gross transferred money to Imereti region. Volume of money transferees 3 times increased. .
3. The region has two ATMs, plastic cards users number approached 162255 and it had been taken out 3,82 million GEL from ATMs.
Currency exchange points successfully developing in the region. Two new licensed points have been launched in Zestaponi this year, new other points opining is scheduled in up-coming future.
Banking Business and Economy Condition in Samtredia Region
Two bank instances provide their work in Samtredia region: branches of “Peoples`s Bank” and “Bank Republic”.
1. Banking credits: according to first month of 2006 the branches released 1,3 million GEL loans. According to 2007 dates, banks released 1,563 million GEL loans, it mentions 20% generation relatively with the recent year. But Zestaponi outran Samtredia. It should be outlined that many Samtredia residents receive credits at micro finance organizations “Constanta” and “Cristal”, having serious creditory portfolio in the region.
2. Samtredia is on the second place after Kutaisi concerning money remittances volume. In the first half of 2007, money transfer volume included 7,55 million GEL to Samtredia branches. Money transfer volume increased 2,2 times relatively with the recent year.
3. The region has 4 ATMs. Plastic cards owners number approached 14 thousand people, 9 million GEL was taken out from ATMs. The money is basically investing in real estate and small business development, what provided prices increase on real estate. The dates faces, that banking business is generating and perspective in Samtredia.
Banking Business and Economy Condition in Chiatura and Sachkhere Regions
Chiatura and Sachkhere regions, as economically inter- depended regions gradually developing separately. Three bank instances provide their works in Chiatura: People`s Bank, Tao Bank and the Bank of Georgia`s. And just branch of People` s Bank in Sachkhere.
1. According to 2007 dates, regional banks released 0,9 million GEL debt while two month period.
2. Money transferees to Chiatura and Sachkhere banks included 3,535 million GEL, 16,5% of whole remittances to the other regions of Imereti. The number faced double increase relatively with the recent year.
3. Deposits amount of four bank instances of the regions included 1,14 million GEL, 27% of Imereti region. Deposits amount in Sachkhere and Chiatura include 5,755 million GEL, 36,4% of whole Imereti region, expect Kutaisi. That appoints on infrastructure development in the region, what was also proved following economy monitoring of the region. Just appearing on the market of the new company “Georgian Margants” and separating millions of Lari among damaged population provided business activity increasing and prices growing on real estate with 100-200%. Besides, expectations about investors entering the market, increased. In addition, trade service sector faced developing and realization of several huge products has taken place (large trade centre construction). Micro financial organizations provide effective work concerning crediting issues. If “Georgian Marganets” will really provide pledged investition project realizing it will maintain employment of Chiatura many residents, it will have effect of multiplication and will provide affective development of economy and other sectors, demand on banking credit and service will increase. We believe, banking sector should start care about Chiatura region assimilation.
According to our monitoring materials analyze, banks do not provide effective business providing concerning crediting issue in Sachkhere region. The reason is that very few banks entering the region. But we believe, that banking sector development is necessary for small business providers. Prices in Sachkhere regions equal to Kutaisi and often higher. So, inculcation of banking products and banking sector will have a success in the region.
* * *
Following review of statistic and basic directions of the Imereti region together with banking business perspectives running in several districts, suggest you statistical materials and economic monitoring based conclusions:
1. Banking sector face affective development in Kutaisi and Imereti region (check schemed No:4) and presents to be main factor of the economy development. For fast rates of generation, banks will have to provide inculcation of new banking products and services improving. Moreover, we believe, closing of the regional economy to the west standards, new branches and service centers opening is bearing importance. We positively estimate opening of bank “Republic” Kutaisi branch and service-center of “Tao Bank” in Chiatura. We have information about “Tao Bank” scheduled new branches opening in Kutaisi and Imereti region. Our analyze faces, that Kutaisi requires at least 80 service- centers and bank` s branch acting in the city, but the number does not surpass 30.
2. We believe banks should care about banking business widening in Tkhibuli region, because investing company “Sakinvest” could bring into work two large mines and maintaining of 600 persons employment. Generation of employment is expected in up-coming future and average salary will approach 300 Lari. It mentions that locally produced amount appears in Tkhibuli, expect of money remittances. Such sort of perspective provided prices increase on commercial and living areas.
3. Long rows to cashes and operation halls was believed as the reserve by banking management. It especially concerns to Kutaisi. If banks share our experience concerning widening of service –centers in Kutaisi, the city will turn into one of top banking centers of he country.
4. Economic monitoring providing of the region faces that the confidence towards the banks increase, more and more entrepreneurs and physicals wish to become active clients of the banks, expecting new services and correspondence environment.