Economic development is a constant, transformational process, which without appropriate tools loses its flexibility and becomes less efficient. As foreign practice shows, leasing is a proven attribute of financing, which turns startups into small businesses, and small businesses into big players of the field. Therefore, its successful use in the Georgian reality creates a significant benefit for the country’s economy, which is reflected in attracting international investments and establishing business relations.
Although the sector itself is less developed, its true pioneer – TBC Leasing, is in its 19th year of successful activity. The company makes a significant contribution to the development of Georgian business. At the same time, with the help of international partners, it is saying a new word in the direction of supporting the “green” economy. TBC Leasing is a supporter of green projects, constantly trying to expand its area of activities and offer customers all the assets related to caring for the environment.
GEORGIA TODAY spoke to Gaga Gogua, Director General of TBC Leasing, to find out more about the importance of the service for the economy, the current situation in the sector, and the company’s activities and future plans.
“Next year, our company will celebrate 20 years of existence,” he tells us. “TBC Leasing has been operating for 19 years in the local market, and during this time, it has managed to bring significant benefits both to our partners and the whole Georgian economy.
“The company’s market share is 76% and it manages a portfolio of up to 300 million GEL. In fact, this means 5,000 satisfied customers and up to 250 million GEL of investment for our country, of which 200 million are foreign resources that we will invest in our partners.
“It’s also our achievement that today, the company employs up to 150 persons. This is a growing number, as our company has grown twice in the last 5 years,” Gogua notes.
“Moreover, the company still maintains ‘BB-,’ the highest credit rating among Georgian non-banking financial institutions, assigned by the influential international rating agency Fitch, which allows us to have access, stability and direct negotiations with foreign investors and creditors.”
Which companies and startups does TBC Leasing finance?
We finance almost all the fields which need financial assets, including medicine, construction, development, commercial real estate, service, road construction, agriculture, trade, HoReCa, light industry, renewable energy, automobiles, technology, media and telecommunications.
We started implementation of innovative products recently, such as solar panels, which help our partners reduce their expenses.
Along with business fields, TBC Leasing finances vehicles for both legal entities and individuals. Today, any legal entity that wants to purchase a vehicle can take advantage of operational leasing, which means that TBC Leasing, as the official owner, is responsible for the full maintenance of the vehicle, and the business simply uses the fleet.
In this direction, TBC Leasing now owns a 30-35% share of the market, thanks to its flexibility.
We financed many startups which are very successful today, with the aim to contribute to the Georgian business sector. As such, TBC Leasing is involved in both Enterprise Georgia and Agriculture Ministry projects, supporting local production as a whole.
We also actively support fishing, being the pioneers who financed a fishing boat. In the future, we’ll continue to support a fleet.
TBC Leasing also supports domestic flights in Georgia. We’ve already financed company Vanilla Sky, performer of domestic flights. If this area is expanded in the country, we’re ready and eager for partnership.
How is the work of TBC leasing reflected in the country’s economy?
Assets purchased through leasing are direct investments in the economy. To compare, the share of leasing in GDP in the European and US markets is 4%, while in Georgia it’s up to 1%. Leasing in Georgia is developing business in which the state is also involved. As such, in 2020, in the strategic development plan of the country, development of leasing was added, which was hindered due to the pandemic. Now, the state is working intensively in this direction for its proper development.
I’d say that TBC Leasing is the number one company in the credit market, however, we have increasing ambitions to achieve even more and be a leader among more and more leasing companies. We currently own 76% of the market, but, for us, the most important thing is to see healthy competition, more international leasing companies entering the local market.
We consider ourselves a kind of “locomotive” in this direction, and we’ll be working with the state to ensure proper and interesting development of this field.
As I mentioned, the resources attracted by us to the country are worth 250 mln, of which 200 mln is foreign investment which the company uses to finance our customers, which we call our partners.
Eventually, all this strengthens the country’s economy, that’s why we are so dedicated to our work.
Could you summarize the last year for the TBS Leasing team?
Although it was the year after pandemic, so difficult for all businesses, the company still grew financially by 25 mln GEL. This was the biggest profit achieved during the company’s existence. Considering the expected financial difficulties, we planned our activities accordingly, focusing on eliminating expenses.
Solar panels were part of this strategy. Also, we introduced a unique product in the Georgian market – operational leasing, which helps customers, such as fleets of construction equipment owners, eliminate their expenses by 20-30%. This means that we rent at a cheaper price than they could hire or buy elsewhere themselves.
During the pandemic, unlike many other companies, our company managed to obtain funding. This was the time when EBRD, FMO and other big creditors entered our market. Overall, the year after the pandemic went well for our company.
What is the current situation in the Georgian market in your sector?
Before the pandemic, the market grew by 20%. Due to the pandemic, in 2020, the market was reduced, as problems appeared in each field. However, 2021 was a year of growth both for our company and the market. The market grew by almost 10%. This year, the first quarter of 2022 was challenging due to the war in Ukraine. However, the second quarter was more active both in our company and in the market, which is a good and positive trend. GEL 63 million was invested in this quarter from our company.
What about the forecasts for the next year in your field, and your future plans?
We’ll continue to provide our partners with our innovative, exclusive and unique products and services.
Moreover, we want to invest more in the green economy and continue to introduce products which eliminate expenses for our partners. We also have a funding brained from GGF, through which we’re providing technical assistance to our customers in terms of solar panels, etc. In short, we’ll continue to surprise our partners! We’ll stay focused on the green economy and renewable energy sources, as this is vital for a healthy future and economic prosperity.
Regarding the field in general, the development of leasing as a business in Georgia is a long-term prospect; however, we believe there will be increasing international interest and cooperation prospects, that’s what we’re working for, to have more and more leasing companies appear in the local market, including international. The contribution of TBC Leasing to this process and the development of the field as a whole will be significant.