TBC actively continues supporting programs for startups, micro, small and medium-sized businesses, which is a prerequisite for the development of Georgia’s startup ecosystem. The bank is focused on creating a sustainable environment for business development, and for this reason, it is strengthening cooperation with various international financial agencies.
Sida – the Swedish International Development Cooperation Agency, acts as a financial guarantor of entrepreneurs’ business activities. TBC provided the crossing point between the latter and Georgian entrepreneurs. More specifically, a guarantee program agreement was signed between Sida and TBC to support the development of startups and micro, small and medium businesses, including women entrepreneurs, in Georgia.
TBC has been working with the Sida since 2018, for whom it is the first cooperation project with a commercial bank in Georgia. Since, according to the guarantee program, Sida shares the credit risk of the borrower, it has significantly helped startups, micro, small and medium businesses in the fields of agriculture, trade, production and services to expand their activities.
A guarantee by Sida is a sovereign guarantee, backed by the Swedish Government. The guarantee is intended to serve as a catalyst for development purposes by incentivizing the financing institution to lend to clients that are often regarded as higher risk.
Since the beginning of the guarantee program, more than 1500 beneficiaries have been financed, of which more than half were representatives of different regions, while more than 20% were female entrepreneurs and startups.
This guarantee is in line with the common interests of TBC and Sweden to promote women’s economic empowerment and increase access to finance for local entrepreneurs.
Under the guarantee program TBC and Sida will share the risk equally, however, depending on the borrower and the loan category, Sida will share the higher portion of the risk, particularly, when providing financing to women entrepreneurs, startups or when loans are taken for the environmentally friendly investments.
The partnership between TBC and Sweden has created development opportunities for local startups, including companies with outstanding concepts and innovations operating in different parts of Georgia.
Startup in all businesses involves a lot of risk, so it is difficult for credit organizations to finance the startup stage. Therefore, such projects are vital for supporting the start-up ecosystem.
There are already many companies and startups in Georgia which were directly affected by the partnership between TBC and SIDA and found new ways and opportunities for development through the joint project.
The program of TBC and Sweden is mainly focused on the development and strengthening of businesses operating in the regions. One example is NutWorld LTD, a nut processing factory in the city of Zugdidi, which has been operating on the market since 2019. The company’s goal is to purchase nuts from farmers and residents on the local market, and to process and sell them in different countries of Europe and Asia.
Nutworld, headed and co-owned by Rusiko Ninua, employed only 20 workers before joining the SIDA project. Since July last year, the project allowed them to draw an additional $250,000 credit line. In turn, this increased the ability to purchase and process more raw materials (nuts) from suppliers. As a result, the enterprise exported a much larger amount of products, and the increase in capital resulted into expanding the staff to 35-40 people.
The cooperation between TBC and Sida also significantly helped another Georgian LTD – ‘Agrobade’, founded and headed by Avtandil Maisuradze, the team of which is specialized in the development of various branches of agriculture, irrigation system, nursery farming and also bringing and installing anti-hail nets. ‘Agrobade’ LLC, located in the village of Ruisi, Kareli district, is among the outstanding participants of the program.
The team behind ‘Agrobade’ knew that such products were not produced in the country, and decided to be the first on the market. From April 2021, they were involved in the joint project of TBC and Sida, within which a 230,000 GEL loan was approved. The mentioned amount significantly helped the enterprise to develop.
Yet another Georgian startup, the success of which was greatly contributed to through the joint project of TBC and Sida, was LTD Clean House, headed by Nino Japaridze, founded in 2022, which operates in the Imereti region and offers various facilities, including washing, drying and ironing services for various types of fabrics, using the latest technologies.
After a successful kick-off at the start-up stage, the enterprise team realized that it was necessary to expand the business. The main challenge facing them was the cost of the equipment, which they would have been able to purchase only after 5 years with their income of the time. TBC and Sida guarantee program helped them in this, through which they raised 220,000 GEL and purchased the needed equipment. After receiving funding from the project, their production capacity was strengthened, business and its operational capabilities were expanded, they doubled the labor force and had to pay half the utility costs thanks to the eco-technologies they were able to use.
From 2019-2021, TBC Bank disbursed 1,719 guaranteed MSME loans for a total amount of close to $72 million. TBC and Sweden continue to cooperate and plan to increase the limit of the existing guarantee line, which will allow TBC to continue financing micro, small and medium businesses. Improving access to finance will strengthen their competitiveness and contribute to the sustainable development of this segment, which, in turn, is a prerequisite for the creation of new jobs and economic growth of the country.