MICROCAPITAL BRIEF: Isbank Georgia, IFC Agree on Cross-currency Interest Swaps, $10m Loan for SMEs

Isbank Georgia, a subsidiary of Turkey-based bank Türkiye Is Bankasl, recently agreed to borrow USD 10 million from IFC, a member of the World Bank Group. Isbank is to use the funds to on-lend primarily to small and medium-sized enterprises (SMEs) in Georgia. The two financial institutions also signed a contract under which they will participate in cross-currency interest swaps.

Hakan Kural, the Deputy CEO of Isbank, said, “The long-term USD 10 million loan will allow us to…help [SMEs] to become more competitive and generate employment. Execution of interest rate and cross-currency swaps will enable us to manage our assets and liabilities better, which in turn will increase benefits for our customers and shareholders.”

Launched in 2012, Isbank reported share capital of USD 21.4 million, total assets of USD 92.9 million and a net quarterly loss of USD 531,400 as of June 2020. Türkiye Is Bankasl is a private bank in Turkey with 1,235 domestic branches plus 22 more service locations in five other countries. As of June, the bank reported total assets of USD 75 billion.

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, it reported total assets of USD 96 billion.

The World Bank Group is a multilateral organization whose overarching goals are to promote shared prosperity and end extreme poverty by 2030. With 189 member nations as of 2020, the group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the year ending June 2019, the World Bank Group disbursed a total of USD 62 billion in loans, grants, equity investments and guarantees to partner countries and private businesses.

By Nathan Kiplagat, Research Associate

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/F47006C9A5AE0AFC852585E600284116

Isbank homepage
http://isbank.ge

Isbank financials
http://isbank.ge/en/about-us/investor-relations/financial-statements

Türkiye Is Bankasl homepage
https://www.isbank.com.tr

IFC homepage
https://www.ifc.org

IFC financials
https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc_new/investor+relations/ir-info/financial+statements

World Bank Group homepage
https://www.worldbank.org

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