The European Investment Bank (EIB) has signed a guarantee agreement financially supported by the European Union with TBC Bank, enabling it to extend financing to the local private sector on favorable terms, including with reduced collateral requirements.
The EIB guarantee will unlock over €31 million of financing for small and medium-sized enterprises (SMEs) in Georgia by providing 80% of the coverage of potential losses on each loan originated by TBC Bank. It will contribute to inclusive economic growth in the country with a specific focus on regional entities, women-led businesses, young entrepreneurs and start-ups.
The guarantee is under the SME Access to Finance Initiative supported by the European Fund for Sustainable Development. This joint program by the EIB and the European Commission aims to enhance access to finance for SMEs and promote financial inclusion of underserved segments, such as start-ups or youth- and women-led businesses.
The guarantee operation also contributes to sustainable economic recovery under the European Union’s flagship Economic and Investment Plan for the Eastern Partnership, which aims to help 80 000 SMEs in Georgia.
“The EIB is pleased to support women in business, young entrepreneurs and start-ups in Georgia through our joint initiative with the European Commission,” noted EIB Vice-President Teresa Czerwinska, responsible for the Bank’s activities in Georgia. “To be implemented by one of Georgia’s leading banks, TBC Bank, this guarantee facility will promote financial inclusion for underserved SMEs and increase their contribution to the economy. Supporting the growth of enterprises and diversification of the Georgian economy is particularly important as the country has just recently been granted EU candidate status.”
“The EU’s Economic and Investment Plan for the Eastern Partnership is the backbone of EU-Georgia cooperation to support small businesses, stimulate jobs and growth, promote connectivity and foster Georgia’s green and digital transition,” European Union Ambassador to Georgia Paweł Herczynski said. “We are pleased to support today’s guarantee agreement, which takes an inclusive approach to providing access to finance and job creation. Economic growth that is inclusive and sustainable is crucial for Georgia’s socio-economic development and for the resilience of Georgia’s economy. Working on these EU priorities – a more inclusive, sustainable economic growth – will help Georgia on its EU path.”
The guarantee will focus on regional entities, women-led businesses, young entrepreneurs and start-ups
“We are happy to continue our strategic partnership with the EIB and announce the successful completion of another risk-sharing agreement,” said Vakhtang Butskhrikidze, CEO of JSC TBC Bank. “This transaction is testament to the well-established, strong partnership between our organizations, and our shared values to strengthen women’s economic empowerment, promote young entrepreneurs and start-ups and support the country’s regional development. Innovative financial instruments of this kind are very important, as it enables TBC to accelerate financing for underserved SMEs, strengthen their competitiveness and support sustainable economic development and job creation in Georgia. I would like to thank the EIB for this extended support, and I’m convinced we will have many more opportunities to work on impactful deals in the future.”
About the EIB and EIB in Georgia
The European Investment Bank (EIB) is the long-term financing institution of the European Union, owned by its Member States. It provides long-term finance for sound investments in pursuit of EU policy goals, supporting projects in four priority areas: infrastructure, innovation, climate and environment, and SMEs.
Since 2010, their operations in Georgia have promoted economic and social development in the country. They have supported key sectors, including energy, transport, water and wastewater management, sustainable agriculture and small businesses. Their financing in Georgia is aligned with the European Neighborhood Policy, the Eastern Partnership and other EU bilateral agreements.
Their operations are guided by the European Union’s Global Gateway strategy and the EU Economic and Investment Plan for Eastern Partnership. They work hand-in-hand with our partners from Team Europe to promote territorial development and green projects. They also support reforms aimed at strengthening Georgia’s economy as it pursues EU membership.
About the SME Access to Finance Initiative
The SME Access to Finance Initiative is a joint program launched by the European Investment Bank and the European Union that aims to enhance access to finance for small and medium businesses (SMEs), as well as financial inclusion of underserved segments, such as start-ups or youth- and women-led businesses.
The Initiative helps strengthen the local private sector, enhancing economic resilience and sustaining employment in the European Union’s southern and eastern neighborhood as well as sub-Saharan Africa.
It is supported by the European Fund for Sustainable Development under the European Union’s External Investment Plan.
