SME Credit Line - Georgia

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The project consists of a Framework Guaranteed Loan Programme, with direct loans to be provided under a sovereign guarantee to private Georgian banks for on-lending to private small and medium-sized enterprises (SMEs). The project objectives include: i) providing term finance for investment, working capital and trade finance needs of eligible SMEs; and ii) strengthening a core group of Georgian banks to become effective financial intermediaries by improving their credit skills and assisting in their institutional development. The transition impact of the project will be significant, particularly in supporting the development of the financial sector, the regulation and effective supervision of banks, and in meeting the financing needs of new private SMEs, as well as privatised and restructured firms. Georgian private banks meeting eligibility requirements designed to identify, and support, those that can develop into sound banks within the project time-frame. TBC Bank, Tbilcombank and Tbilcreditbank are expected to participate at an early stage. The total funds for the credit lines to the participating banks which qualify before 30 June 1998 will be up to US$ 12 million (ECU 9.6 million). Up to US$ 12 million (ECU 9.6 million). The participating banks will follow the EBRD's "Environmental Procedures for Local Banks" for all sub-loans financed through the credit line. In implementing these procedures, the participating banks will assess potential environmental issues associated with sub-projects, which are required to comply with local/national environmental, health, safety, and public participation requirements. The participating banks will report annually on environmental issues related to the credit line. Technical cooperation funding totalling ECU 326,000 has been provided. Funding of ECU 1,156,000 is being sought from donors for resident advisers and specialised assistance.