The European Bank for Reconstruction and Development (EBRD) has extended its first loan in local Georgian currency, the Lari (GEL), worth about USD 1 million, to Crystal, a local microfinance institution (MFI). Along with the loan, the EBRD has also offered USD 100,000 in grant funds. Through these provisions, the EBRD intends to help Crystal meet rural Georgians’ “increasing demand for longer-term loans” in local currency units, and strengthen Crystal’s risk management and governing structure. The EBRD also claims that it is prioritizing lending in local currency units in its countries of operations to insulate them from future foreign exchange fluctuations.
About the EBRD:
The European Bank for Reconstruction and Development (EBRD) is, according to its website, “the first international financial institution of the post Cold War period.” Headquartered in London, the bank began operations in 1991 upon the agreement of 40 countries and is now “owned by 61 countries and two intergovernmental institutions.” It aims to “finance operations that are both commercially viable and assist development” in 29 countries in Central Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees, and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs).
About Crystal:
Crystal is a joint-stock company microfinance institution (MFI) that operates primarily in rural areas of western Georgia. Crystal was initially established as a micro-credit program that functioned as a part of a local non-governmental organization called “Charity Humanitarian Centre Abkhazeti” (CHC). In 2004, it was recognized as its own MFI called “Crystal Fund,” and by 2007, it was officially registered within the National bank of Georgia as a joint-stock company microfinance organization. According to the MIX Market, as of 2008, Crystal has a gross loan portfolio of USD 4.2 million, total assets of USD 4.7 million, return on assets of 8.41% and return on equity of 35.86%. For more information, visit the link provided below in the bibliography.
Bibliography:
[1] EBRD Press Release. http://www.ebrd.com/new/pressrel/2009/091221c.htm
[2] EBRD. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+(EBRD)
[3] Crystal. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Crystal:+Joint-Stock+Company+(JSC)+Micro+Finance+Organization
Original Source Article: Press Release from the EBRD
21 December 2009
EBRD provides first local currency loan in Georgia
$1 million to JSC Crystal MicroFinance Organisation
The EBRD is increasing the availability of financing to private businesses in Georgia by extending its first local currency loan in the country for on-lending to micro and small enterprises (MSEs). The Bank is extending a Georgian Lari (GEL) loan, equivalent to $1 million, to Crystal, a non-bank microfinance institution, to support the organisation in its drive to expand operations and further develop its portfolio of MSE credits, particularly in rural areas and the agricultural sector.
Established in 1998, Crystal operates in Western Georgia, where it has a strong presence, including in some rural areas where no other lender operates. Through this transaction the EBRD is helping Crystal meet the increasing demand for longer-term loans in GEL, facilitating MSE’s access to financing at a time when local currency lending in Georgia remains limited.
The EBRD is setting a specific priority of promoting local currency borrowing in its countries of operations in a drive to reduce excessive dependency on foreign currency debt. The EBRD loan is accompanied by $100,000 in grant funds, which will be used to strengthen Crystal’s corporate governance and risk management.
Since the beginning of its operations in Georgia, the EBRD has committed over 663 million to approximately 120 projects in the financial, corporate, infrastructure and energy sectors.
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