The first economic index of the 20th century is that country’s safety and, first of all, stability depends on its finances, currency and banking system.

Though economic growth rates in Georgia leave much to be desired, events going on in the banking system deserve appraisal. There are two interesting issues: the first is that currency reserves are likely to decrease from 32-40% to 18-24% (our opponents might say that this trend has been connected with events in the world market, but in a country with such risky market it is really a merit of the banking system); the second is turn towards financing of small and mid-size business.
Small business in Georgia has recently encountered with a serious partner ? commercial banks. According to the National Bank data, Tbiluniversal bank ranks among ten banks that forecast present weather in the banking market of Georgia. By its last year’s profit, the bank reached the tenth place, but by populations’ bank deposits (which is a serious barometer of image and trust) it is in the 8th place. This is a serious statement taking into consideration the fact that there are 26 commercial banks in Georgia all in all. “Finance indicators of Tbiluniversal Bank for the year 2001 look quite impressing” ? said Tariel Gvalia.
“Finance indicators of Tbiluniversal bank exceeded the similar parameters of the banking sector. For instance, the return on equity amounted to 12,3%, while within the banking system it made up only 5,3%. Against the background of 15% assets growth within the system, that of Tbiluniversal bank exceeded 19%. The same holds true with the other indicators as well.
The year 2001 can be assumed as the period of extensive structural changes in the financial market of Georgia: the private sector of financing technologies has been significantly improved. The financial service market of small businesses and individual entrepreneurs has become more active and numbers of banking institutions have joined this process. The demand on long-term financing and on quality of services has greatly increased. The innovative or less prevalent types of financial services is becoming more and more popular, namely the credit card settlement tools, instalment plans, special saving instruments, etc. In this situation, bank managers should acquire such qualities as mobility and ability to react adequately to changes.
I think we have managed to do so. In 2001, the credit activity of the Bank has been increased both in terms of operations’ volume and range of services. We also announced an offering of new services; this particularly refers to the traditional and new systems of money transfers and deposit products oriented on private persons and entrepreneurs.
In 2002, Tbiluniversalbank will be facing a number of goals both in terms of development of the market new segments and further improvement of internal structure of the Bank. In 2002, we will pay more attention to individual entrepreneurs and natural persons, intensively proceeding with offering wide-range services designed for this category of customers. At the same time, the perspective of completing financial service for the mid-size business still remains to be appealing. Here we face the increasing demand on up to date financing, deposit or risk management instruments. Judging by our experience, I presume that the standing of Tbiluniversalbank with regard to servicing the mid-size business would considerably strengthen in 2002.
The programme that is of great interest to our reader, is a programme on the development of small business. The programme that was developed jointly with the Eurobank provides for 18-24% long-term credits. Apart from low interest rates, the key target of the programme is its availability to businessmen who have real business. This programme contributed to the growth of population’s employment as well as brought much benefit to country’s economy.
– Mr. Tariel, the banking market of Georgia failed to avoid cataclysms. Many of them closed, others faced a very difficult situation. What is the secret of your lasting success?
– I think the reason of our position and dynamic development is the bank management and its strategy that have till present been based on conservative approach. This, certainly, implies refusal of excessive caution and unequal risks. We might have lost so many customers due to the mentioned approach. However, today we can see that this policy justified our hopes and provided the bank with firm positions necessary for the transition to the new and more aggressive stage of development.
– Small business represents roots of the developing Georgian economy. The development of Georgian economy is impossible without it. At the same time, we should note that compared with other businesses, small one is a more independent and distinctive organism that grows and develops in a natural environment. It is a good indicator of macroeconomic situation. The natural phase of the development of Georgian economy in the given stage implies the development of small business. This would become grounds for the development of large business in the future. Therefore, our interest in this segment is great, too, so we try to promote its development as much as possible. In this case, we should be satisfied with final results: the bank becomes firmly established in this segment and creates a great base for the future. Small business gains access to financial resources and other banking products, which promotes the growth of its financial efficiency and provides additional jobs, high-quality products and services to the population. All this taken together makes conditions for the economic development of the country. Its benefit for the state will depend on the work of state management units.
– Partnership with the Eurobank is, certainly, a great responsibility. What does this partnership imply? Does the Eurobank interfere with your everyday activities?
– Partnership with the Eurobank was, certainly, serious responsibility, especially at the start of our relationships. In 1997, positions of our bank in the market were much weaker, its financial state was not strong either. We think that our policy and great wish to co-operate with the Eurobank pursuaded its representatives to establish business relations with us. We can now say that our expectations came true. Our co-operation covers allotment of long-term credits for our bank and provision of technical assistance such as attraction of consultants, organisation of human resources training, assistance in the development of different directions of the bank. The Eurobank, certainly, watches our activities as we have an open credit line, but it does not interfere with our everyday activities. Perhaps, we have grounds for this due to our successful business relations.
– The Eurobank is our donor. It makes long-term financial resources available to us. It is also a partner that, as mentioned above, provides great assistance in the methodological and procedural improvement of different directions of banking as well as in human resources training and consultations for bank managers, etc. In short, we consider them partners.
– Which is your most popular project?
– Product popularity should, probably, be determined by market, but the most important project for us now is micro loans programme that we have worked on since last year. The programme provides for the financing of micro and small business. Nowadays, there are many similar businesses. Everywhere we can see shops trading in foodstuffs and other goods, beauty saloons, private market traders, small enterprises, etc. They represent target market of this project. The mentioned project is strategically important for the market as strengthening of its positions in this segment would make it possible to diversify risks and collaterally deal with the development of business environment”.
Very often we do not see positive processes going on around us and complain of unbearable life standard. It is now high time to act, moreover now that we have a useful partner.