The Council of Europe Development Bank (CEB) approved on November 16 a € 5 million loan to JSC Credo Bank (Credo) to provide a credit line to micro-enterprises in Georgia for the financing of their productive investments.
The micro, small and medium-sized enterprise (MSME) sector is a vital part of the Georgian economy and constitutes an important source of employment in a country where unemployment is almost 14%, considerably higher than the EU average of 8%. The microfinance segment accounts for only 5% of total financial sector assets in Georgia and there are obstacles when it comes to accessing financing, particularly in rural areas.
The CEB aims to boost the development of micro-enterprises by supporting self-employment, entrepreneurship and income-generating activities. Through Credo’s numerous branches and extensive coverage of the country, the CEB will channel financing to farmers running small agriculture businesses such as cattle-breeding and bee-keeping, as well as small business owners in rural areas. It is expected that some 3,000 micro-enterprises will benefit from the funds, including low-income self-employed entrepreneurs who are often unable to meet traditional banking requirements to obtain financing.
This is the second CEB loan extended to Credo for the financing of small businesses in Georgia, following the approval of a similar project in 2016 and its successful completion. Recognising the importance of microfinance for job creation and preservation, the CEB has been active in this sector in several of its member countries, including Bosnia and Herzegovina, Bulgaria, Italy, Spain and “the former Yugoslav Republic of Macedonia”.
CEB Governor Rolf Wenzel said: “Providing small businesses with access to financing is of major importance when it comes to promoting financial inclusion and strengthening social cohesion. In recent years, the CEB has redoubled its efforts to help create jobs in its member countries. Through our ongoing partnership with Credo in Georgia, we aim to unlock access to financing for a large number of entrepreneurs and micro-enterprise owners in order to support employment and give a boost to the economy.”
Having become a CEB member in 2007, Georgia has benefited from CEB financing in the area of job creation and preservation through support to micro, small and medium-sized enterprises (MSMEs) as well as in public infrastructure and environmental protection. The latter has included the rehabilitation of around twenty state schools in Tbilisi and a series of measures taken to improve their energy efficiency.
Original source: CEB
Published on 16 November 2018
