MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $35m in Local Currency to Bank of Georgia for Microfinance, SMEs - Including Women-owned Enterprises

The World Bank Group’s International Finance Corporation (IFC) recently announced it is lending GEL 100 million (USD 35 million) to the Bank of Georgia, a commercial bank owned by the UK-based Bank of Georgia Group, for on-lending to micro-, small and medium-sized enterprises (MSMEs). The Women Entrepreneurs Opportunity Facility, which is cosponsored by IFC and the US-based Goldman Sachs Foundation, is supporting the transaction, with the agreement that one quarter of the total loan value will be directed to women entrepreneurs.

IFC’s Regional Manager for the South Caucasus, Jan van Bilsen, commented, “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 Bank of Georgia Group offers microfinance services, corporate banking, retail banking, wealth management, brokerage and insurance services in Georgia, Ukraine and Belarus. As of March 2019, the group has total assets of GEL 15 billion (USD 5.13 billion) and total equity of GEL 1.92 billion (USD 660 million). It serves 2.4 million clients via 276 branches.

The Women Entrepreneurs Opportunity Facility was launched by IFC and the Goldman Sachs Foundation as part of the Goldman Sachs Foundation’s “10,000 Women” initiative. This initiative supports women entrepreneurs with business education, financial education and funding. The Goldman Sachs Foundation is a nonprofit affiliate of the financial services firm Goldman Sachs that is involved primarily with health and education, particularly entrepreneurial education. As of year-end 2017, the Goldman Sachs Foundation has annual expenses of USD 22.1 million and total assets of USD 568 million. Founded in 1869, Goldman Sachs is headquartered in New York and maintains offices in 36 countries. As of 2018, it reports unaudited total assets of USD 933 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 2019, IFC reports total assets of USD 94.3 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2019, it has 189 member nations. The group encompasses: (1) IFC; (2) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During 2018, the World Bank Group committed USD 66.9 billion of funding to partner countries.

By Eugene DeCosse, Research Associate

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/AD6BC65F2697FCA285258450002FDA08

Bank of Georgia homepage
https://bankofgeorgia.ge

Bank of Georgia Group homepage
https://bankofgeorgiagroup.com

Bank of Georgia Group quarterly results
https://bankofgeorgiagroup.com/results/earnings

Goldman Sachs Foundation webpage
https://www.goldmansachs.com/citizenship

Goldman Sachs Foundation financials
https://pdf.guidestar.org/PDF_Images/2017/311/678/2017-311678646-102969fc-F.pdf

IFC homepage
https://www.ifc.org

IFC annual report
https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/annual+report/download

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

World Bank annual report
https://www.worldbank.org/en/about/annual-report