MICROCAPITAL BRIEF: Black Sea Trade and Development Bank to Loan $7m to FINCA Georgia for On-lending to Micro- and Small Enterprises

FINCA Bank Georgia (FINCA Georgia), the Georgia-based subsidiary of the Foundation for International Community Assistance (FINCA International), a US-based nonprofit microfinance organization, recently announced that it has entered into an agreement with the Greece-based international financial institution Black Sea Trade and Development Bank (BSTDB), to receive a loan of USD 7 million. The loan is intended to be used for on-lending to micro- and small enterprises that operate in the industrial, agricultural and service sectors. According to Ihsan Ugur Delikanli, the president of BSTDB, the organization hopes to “increase access to finance for women entrepreneurs and people in rural areas” through its investment in FINCA Georgia. Ketevan Burduli, the chief operating officer of FINCA Georgia, said that the loan would help the organization “expand access to working capital loans for both new and existing clients”[1].

As of March 2014, FINCA Georgia reported total assets of USD 84 million, a loan portfolio of approximately USD 71 million, 55,000 borrowers, return on assets of 3.43 percent and return on equity of 13.24 percent. The institution does not accept deposits. As of 2013, FINCA International had total assets of USD 1.1 billion and served 1.7 million clients through subsidiaries in 22 countries. As of June 2015, BSTDB has an authorized capital of EUR 3.45 billion (approximately USD 3.82 billion).

By Arpita Sarkar, Research Associate

About FINCA Georgia:

FINCA Georgia is a microfinance institution (MFI) and a subsidiary of the Foundation for International Community Assistance (FINCA International), a US-based nonprofit microfinance network. As of March 2014, FINCA Georgia reported total assets of USD 84 million, a loan portfolio of approximately USD 71 million, 55,000 borrowers, return on assets of 3.43 percent and return on equity of 13.24 percent. The institution does not accept deposits.

About FINCA International:

The Foundation for International Community Assistance (FINCA) International, a nonprofit microfinance network based in Washington, DC, provides financial services to poor families through a network of locally managed institutions. FINCA was founded in 1984 by Dr John Hatch, who is known for helping develop “village banks” in which each member guarantees the loans of other members. FINCA targets its services to poor women living in the Americas, sub-Saharan Africa and Eurasia. In December of 2011, FINCA launched a subsidiary, FINCA Microfinance Holding LLC, with funding from the International Finance Corporation (IFC), KfW Bankengruppe, Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), responsAbility, and Triple Jump. As of 2013, FINCA International has total assets of USD 1.1 billion and serves 1.7 million clients through subsidiaries in 22 countries.

About Black Sea Trade and Development Bank (BSTDB):

Black Sea Trade and Development Bank (BSTDB) is an international financial institution (IFI) that was established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine in 1997. The organization is headquartered in Thessaloniki, Greece, and it focuses on economic development and regional cooperation. The objectives of the bank include regional trade links, inter-country projects, foreign direct investment and sustainable development. As of June 2015, the organization has authorized capital of EUR 3.45 billion (approximately USD 3.82 billion).

Sources and Additional Resources:

[1] FINCA Press Release: “Black Sea Trade and Development Bank Lends $7 Million into FINCA Bank Georgia to Expand Funding to Micro Entrepreneurs and Small Business,” http://www.finca.org/press-release/black-sea-trade-and-development-bank-lends-7-million-into-finca-bank-georgia-to-expand-funding-to-micro-entrepreneurs-and-small-business/

MicroCapital, July 1, 2013, “International Finance Corporation (IFC) Loans $4m to FINCA Georgia to Support Micro- and Small Businesses, Entrepreneurs,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-4m-to-finca-georgia-to-support-micro-and-small-businesses-entrepreneurs

MicroCapital, April 20, 2011, “responsAbility Social Investments of Switzerland Loans $15m to FINCA International Subsidiaries in Azerbaijan, Georgia, Kyrgyzstan,” https://www.microcapital.org/microcapital-brief-responsability-social-investments-of-switzerland-loans-15m-to-finca-international-subsidiaries-in-azerbaijan-georgia-kyrgyzstan/

MicroCapital Universe Profile: FINCA Georgia, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+Georgia

MicroCapital Universe Profile: FINCA International, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International

MicroCapital Universe Profile: Black Sea Trade and Development Bank (BSTDB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Black+Sea+Trade+and+Development+Bank+(BSTDB)

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