BSTDB Supports Development of Georgian Leasing Market, Allocates USD 3 Million Loan

FROM THE REDACTION

The Black Sea Trade and Development Bank (BSTDB) has supported the development of the Georgian leasing market. The organization allocated a USD 3 million SME leasing facility to JSC TBC Leasing, which is the first BSTDB loan provided to a Georgian leasing company.

In the words of Nana Mikashavidze, the CEO of TBC Leasing, the loan was issued for a 3-year coverage term with one year grace period secured by pledge of rights, equipment and accounts related to lease contracts financed from the proceed of the facility, which will be used by the company for the leasing of vehicles and equipment to small and medium-sized companies engaged in road and residential/industrial construction, textiles industry, printing, trade and distribution, healthcare and food processing.
“The loan will be spent on coverage of investments made in machineries and equipment by the abovementioned companies through leasing, with the amount of individual loans ranging from USD 15 000 to USD 300 000,” Nana Mikashavidze told Georgia Today.
She added that in order to get its project funded a company must have a sustainable financial background and sufficient profitability. “The assets to be financed should be liquid and investment in them should be justified,” she said.
According to the company’s CEO, the new loan is important for supporting successful activity of TBC Leasing and effective growth of the company.
“The new funds give us an additional opportunity to conduct projects with Georgian private companies. The finance will be enough to fund approximately 40-50 new projects,” noted Ms. Mikashavidze.
In her opinion, allocation of this credit by BSTDB to TBC Leasing once again underscores the success of the company and improves the outlook not only for TBC Leasing but the whole Georgian leasing market.
Andrey Kondakov, the Vice-President Banking of BSTDB, told Georgia Today that the bank gives priority to delivering SME finance through both traditional and innovative financial institutions, those being commercial banks and non-banking institutions respectively.
“Working with TBC Leasing under the SME leasing facility will help to achieve BSTDB’s operational objective of supporting the leasing sector development. Due to TBC Leasing’s well-established market presence and strong support from its shareholders, the facility will represent an efficient mechanism for BSTDB to extend medium-term funding to numerous small and medium-sized enterprises in Georgia, which otherwise cannot be accessed by BSTDB directly,” Mr. Kondakov stated.
He added that the company had proven its ability to perform and yet needs additional funding for further development.
The BSTDB representative noted that this facility will also demonstrate the viability of providing longer term funding to Georgia’s developing leasing industry, as well as enhance funding for the growing small and medium enterprise sector in the country.
Andrey Kondakov mentioned that there are certain results that BSTDB aims to achieve through allocation of this loan as the bank believes that by financing leasing companies in the Black Sea region it will not only make leasing more readily available for small and medium-sized enterprises, but will also support the development of sound leasing practices and promote intra-regional cooperation.
“The SME leasing facility for TBC Leasing will have a significant development impact, including institutional development of the company, resulting in further business growth, improved liquidity and client service, as well as medium-term funding of capital expenditures of Georgia’s SMEs and job creation, income generation, and improved company infrastructure increased trade turnover among others between BSEC countries,” Andrey Kondakov stated.
The launching of a leasing program in Georgia follows similar operations successfully implemented in Romania and Russia, with more BSTDB member countries to follow.
JSC TBC Leasing was founded in 2003 by TBC Bank, a leading Georgian commercial bank, that owns a 90 percent stake in the company capital. The other 10 percent belongs to European Bank for Reconstruction and Development (EBRD). TBC Leasing targets small and medium size private companies, which expand their activities and increase their profitability by acquiring fixed assets through leasing. The company is the market leader when – its portfolio grew from USD 0.2 million in 2003 to USD 15 million in 2007.
The Black Sea Trade and Development Bank (BSTDB) is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and the Ukraine.
The Bank supports economic development and regional cooperation by providing loans, credit lines, equity and guarantees for projects in the public and private sectors in its member countries. Its authorized capital amounts to SDR 1 billion (about USD 1.5 billion). The BSTDB headquarters is located in Thessaloniki, Greece.