Banking Results in Samegrelo-Zemo Svaneti Region

Rezo RobaKiDZe

The first half of 2007 faced high rate of local economy crediting in Samegrelo region – Zugdidi, Senaki, Abasha, Tsalenjikha, Martvili, Khobi and Chkhorotsku districts, by acting commercial banks (The National Bank of Georgia, Pro Credit Bank, People`s Bank and Bank Republic).

Released loans by the economy sector included Gel 18, 8 millions during 6 month of the current year. Samegrelo-Zemo Svaneti banking analyze was first time realized, so current year`s statements can not be compared with the recent year` s statements. But we have statements of the first quarter, 2007, of several banks and can report about at least 30% increase of banking highlights as gross loans, deposits, ATM cashes and money transfers what confirms banking sector success. While loans increasing condition, new creditory projects and inculcation of banking products is taking place. The most active district of the region is Zugdidi, where all the banks trying to be launched. Positive moments of banking sectors in Senaki and Khobi districts are very important, where in conjunction with the branches of the “People`s Bank”, micro finance organization “Finka” and Small Business Development Fund affectively realize credit dealing.
Basic floats of the region`s credit resources directed to crediting of trade-services and physicals, accordingly including 32% (6,02 million Lari) and 67% (12,67 million Lari) of gross loans. (check scheme No:1).
Loans service culture importantly improved in the region, overdue reduced, what is also confirmed by our prepared statistical dates. To say exactly, overdue loans of gross loans include 0.34%.
Big volumes of crediting reserves are faced in agriculture, but unfortunately the banks invest less in the field. It especially might be said about nuts growing, and nuts producing modern factory, which came into action in Batumi, but more and more enterprises attempt to be involved in agriculture business and banks should face more activity. Growing of laurel, citrus and unique vine – Ojaleshi – production crediting – is very important.
Vivid of enterprise activity and economy in Samegrelo region is maintained with percentage increase of long term credits. Long term loans (6,1 million Lari) share includes 32,4% of gross loans.
Gross deposits number increasing in the branches of acting commercial banks maintain providing solid development of banking sphere. The volume faced 50% increase comparing with the recent quarter and consisted 16 million lari. Gross deposits coefficient of dollarization consisted 53%, what confirms confidence towards Lari.
Structure of foreign currency transfer to Georgia`s regions is hugely important (check scheme No:2)
The first one is that the received currency volume included 32,3 million Lari.
The second is that the volume of received currency approximately increased with one third, relatively with the same period of the recent year. What means negative trend of foreign transfers in recent year, caused by creaked down problems, because provided limits by Russian side on Georgian products. So new markets were successfully assimilated by our entrepreneurs.
The third is that the geography of receiving un-ciphered and faced at least 2/3% of transfers provided from Russia.
We made reference on migration and one of the biggest result of money transfers, to say exactly, the service bring profit as to families, as well as to our region. Banking statistics and economic monitoring outline the money investing in real estate and private construction issues effectiveness.
While working on banking statistics, we decided to study inculcation of such banking services in Samegrelo region, as ATMs and plastic cards are. As it turned out, the region has eight ATMS, and number of plastic cards owners 10 times increased in the region, and approached 15200 people. According to our dates, the new service is basically used by central and local budget financed organizations, also physical and entrepreneur clients. We have information that in the regions (Abasha, Martvili, Chkhorotsku, Tsalenjikha and Mestia ), having no ATMs, “People`s Bank” decided to provide equalization of the region` s population and outfit its branches with ATMs. We believe, the region has serious reserves concerning the issue. Besides, just 1% of the county`s plastic cards come on the regions.
The positive highlight of the banks dealing in the regions is that they provide effective works with clients concerning foreign currency converting, the statement of the region focused 35 million Lari while 6 month period of the current year. The most successful is dealing of “Pro Credit Bank” and “Bank Republic” branches in Zugdidi district.
Economy monitoring and banking sector study base faces following conclusions making possibility:
1. Despite of banking sector intensive development in the region and creating into important segment, the banks will have to suggest new banking products and services improving for rates generation keeping continuance. Moreover, we believe, that for closing of the region` s economy and banking sector to the west standards, opening of the banks` new branches and service-centers is very important. So, we positively estimate new, solid branch of “Pro Credit Bank” construction in Zugdidi, scheduled to be opened in November 23 in addition with “People`s Bank” Zugdidi branch huge office construction. It mentions new banking products inculcation and the dealing widening maintain. So, in up-coming future we will become witnesses of huge banking capital in Zugdidi. Samegrelo region requires at least 20- 5 service-centers and bank` s branch, but the number not excels 12, according to our analyze.
2. We persuaded in economic project measures and believe in obligatory of banks being ready for their bringing into action. We are sure, that completing of Kulevi terminal construction will importantly impact on the region` s economy condition. Though, while the terminal is under the construction it brings serious profits for Khobi budget. We guess, the banks should schedule opening of service-centers in the territory soon.
3. Zugdidi, Senaki and Khobi obviously face prices important increase trend on real estate, entrepreneur activeness generation, especially in trade-service sector, in addition with affective care of the state budget about infrastructure improvement. It` s natural, that all these factors assist demand on financial resources increase by business-sectors. As we already noted, micro finance organizations try their best in the region and face serious competitiveness against banking sector concerning crediting volumes.
4. One more reserve of banking management is long rows of clients to cashes, operation halls and ATMs. It strongly felt particularly in Zugdidi every branch. We believe, opening of new offices will partly resolve the problem.
5. Monitoring of the region` s economy faces rising of confidence towards banks. More and more entrepreneurs and physicals willing to become bank`s clients, expecting modern and fast service and correspondence environment. So, we recommend commercial banks to provide much more care about widening of their dealing in Samegrelo region, which is one of most perspective.