The International Finance Corporation (IFC), a member of the World Bank Group, has announced a long-term local currency loan of 100 million Georgian lari (around 35 million US dollars) to the Bank of Georgia to help boost access to finance for smaller businesses and women entrepreneurs. The investment is supported by the Women Entrepreneurs Opportunity Facility, a pioneering global initiative by IFC and the Goldman Sachs Foundation to expand access to capital for women entrepreneurs.
Access to finance is the second most-cited problem for businesses in Georgia, according to the World Economic Forum’s Global Competitiveness Index 2017-2018. While small and medium enterprises (SMEs) make up the majority of Georgian businesses, they receive only about 20 per cent of bank lending. IFC estimates the total finance gap for SMEs in Georgia at 2.1 billion US dollars, with demand from women-owned enterprises accounting for 43 per cent of the gap, according to the 2017 MSME Finance Gap Report.
IFC’s investment aims to address this by helping Bank of Georgia expand its crucial local currency lending to micro, small, and medium enterprises (MSMEs), with a quarter of the loan earmarked for women-owned businesses.
Archil Gachechiladze, Bank of Georgia CEO, said: “Amid further de-dollarisation of the Georgian economy, the local currency facility from IFC will further strengthen our position as a leading local currency lender in the Georgian market and enable us to increase lending to the MSME business segment, where we see significant opportunities. The Women Entrepreneurs Opportunity Facility is an important tool that will help us boost our support to female-led enterprises.”
Jan van Bilsen, IFC regional manager for the South Caucasus, added: “IFC is working with Bank of Georgia, our long-standing client, to help expand access to local currency financing, which is critical for the growth of smaller businesses. Those businesses are the engines of economic growth and women entrepreneurs are especially underserved. We aim to ensure all smaller firms get the access to finance they need to grow, create jobs, and drive economic growth.”
The Women Entrepreneurs Opportunity Facility was launched by IFC through its Banking on Women programme and Goldman Sachs 10,000 Women in 2014. To date, IFC has invested 1.4 billion US dollars and reached 53,000 women entrepreneurs in emerging markets through the facility.