Georgia: EIB Global and Credo Bank signed a loan agreement worth GEL 28.8 million to support micro, small and medium-sized enterprises

• EIB Global and Credo Bank signed a loan worth GEL 28.8 million (€10 million) to provide affordable financing to Georgian MSMEs. 
• Lending in synthetic local currency, the EIB is offering a floating interest rate for the first time — not just in Georgia, but globally — for even more attractive and flexible terms for clients. 
• Signature of the arrangement kicks off EIB Global’s €100 million MSME Outreach Initiative for the Southern Caucasus to foster MSME lending by medium and smaller size banks in Georgia, as well as Armenia and Azerbaijan.

The European Investment Bank (EIB), the lending arm of the European Union, has strengthened its long-term cooperation with Credo Bank, Georgia’s fifth-largest commercial bank, by signing a new five-year loan agreement worth GEL 28.8 million (€10 million).

The financing will be available in synthetic floating local currency to let micro, small and medium-sized enterprises (MSMEs) in Georgia enjoy better rates and to protect against exchange-related risks. This is the first such arrangement by the EIB worldwide, setting a precedent for other countries.  

The loan is also the first granted under EIB Global’s €100 million MSME Outreach Initiative for the Southern Caucasus region. Signed in late 2022, the initiative improves inclusion and access to finance for underserved MSMEs in the Southern Caucasus by helping the medium and smaller size banks of Armenia, Azerbaijan and Georgia broaden their service offerings.  

EIB Vice-President Teresa Czerwińska, responsible for the Bank’s activities in Georgia, remarked, “The EIB is very glad to support Georgian MSMEs, providing more affordable capital so that they can continue to work, invest, strengthen the Georgian job market and accelerate its economic growth. This latest loan with our long-time partners at Credo Bank will help the country’s economy overcome some of the problems created by energy and food price shocks, inflation, the pandemic, climate change and regional conflicts. As the bank of the European Union, we are pleased to help Georgia continue to grow, develop and further improve living standards for its citizens.”

“MSMEs are the beating heart of the EU single market economy, and a major engine of resilience,” explained Pawel Herczynski, EU Ambassador to Georgia. “So it’s great news that the EIB and Credo have chosen to sign this loan agreement. I hope it will help smaller companies develop and claim their place on the market. We very much welcome this important contribution to inclusive and sustainable growth in Georgia.”

Maciej Czura, Head of EIB Regional Representation for the South Caucasus, added, “Today, I am delighted to launch the next transaction supporting MSMEs in Georgia — already our third project with Credo Bank, and part of over €340 million we have committed to support Georgian businesses in cooperation with local financial institutions. I look forward to the successful implementation of the MSME Outreach Initiative, which will help implement the EU Economic and Investment Plan.”

“It is our honour to continue our successful strategic partnership with the EIB,” said Credo Bank CEO Zaza Pirtshkhelava. “This is a benchmark transaction of great importance. It grants access to the affordable, long-term local currency funding necessary to MSMEs, our core customer segment. Moreover, it supports Georgia’s efforts to de-dollarise the economy. My sincere appreciation goes to the transaction teams for delivering this project in a short time, and for helping make Georgia and Credo Bank frontrunners in launching this important MSME Outreach Initiative for the Southern Caucasus.”

Papuna Lezhava, Vice-Governor of the National Bank of Georgia, remarked, “The EIB is an outstanding international financial institution and long-standing partner of Georgia, which helps us in economic and social development of the country. Providing funds in both local/foreign currency, EIB focuses on sectors and projects, which have high development impact. This particular €10 million funding in local currency with 5 years maturity and the purpose to finance MSME segment will be an important transaction because of its importance for Credo bank’s business model. ” 

Georgians are the first to benefit from a new EIB credit line for the Southern Caucasus

The loan stems from EIB Global’s €100 million MSME Outreach Initiative for the Southern Caucasus. Created to support regional small and medium-sized banks and financial intermediaries in Armenia, Azerbaijan and Georgia, the initiative will stimulate competition in the banking sector and increase the quality and quantity of finance accessible to MSMEs. Georgian MSMEs will be the first group to benefit thanks to the excellent relationship between EIB Global and Credo Bank.

The initiative will help companies maintain business activities and increase crisis resilience, making Georgia’s economy more sustainable and strengthening its financial sector. MSMEs are key drivers for growing incomes, accelerating job creation and improving living standards. Around 26 500 jobs will be created or maintained in the MSME sector of the Southern Caucasus region, fuelling private sector-driven growth and promoting social inclusion through finance in the form around 6 150 sub-loans for MSMEs. 

The MSME Outreach Initiative is part of the European Union’s flagship initiative to help MSMEs reap the full benefits of deep and comprehensive free trade agreements. It directly promotes objectives of the Economic and Investment Plan for the Eastern Partnership and the EU priorities agreed with the Georgian government.

Background information

EIB Global’s support for MSMEs in Georgia — since launching activities in Georgia in 2007, the EIB has helped finance the country’s small businesses to foster economic growth, innovation, social integration and job creation. To date, the Bank has invested over €340 million in Georgian small business and mid-caps. Our investments through intermediated loans have reached over 5 500 companies and helped sustain approximately 44 000 local jobs. In addition, over 10 000 jobs have been created in Georgia thanks to EIB financing. Working with local financial institutions, the EIB helps Georgia develop new products and enhances companies’ access to finance.

Credo Bank is the fifth commercial bank in Georgia. With its wide regional outreach through 81 service centres, it offers fully-fledged and innovative banking services to over 460,000 customers. The bank’s mission is to support Georgia’s entrepreneurs and their employees to create a better future by offering affordable financial services. International social impact and development finance institutions such as German - Access Microfinance Holding AG, Swiss - responsAbility Investment Management AG, the Dutch – Triodos Investment Management BV and French – Proparco, own Credo Bank.