Financed ProjectsFINCA Georgia

Identification Code:

OP/14/0027

Total Operation Cost:

7.000.000

Maturity:

36 months

Operation Status:

Description and Purpose of the Operation:

FINCA Georgia MSME Facility

Countries of Operation:

Georgia (100,00 %)

Financial Product:

SME's

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

Finca Bank Georgia LLC

Co-Financiers/Participants:

n/a

Guarantors/Sponsors:

n/a

Developmental and Regional Cooperation Impact:

Microfinance has proven a useful tool to fight poverty and the most relevant benefit is reduced poverty and ensured sustainable development and increased economic activity for portions of the lowest income segment of the population. The main argument behind positive impact of microfinance is that microfinance helps entrepreneurs develop, helping the development of micro and small businesses. This creates employment and ensures decrease of income/moral poverty while contributing to increase of the welfare of the most underprivileged layers of the population. Furthermore microfinance has positive impact on employment of women and increases business capacity, self-esteem and participation in community of vulnerable groups of the population. The facility is expected to have modest but favorable economic benefits for the Georgian economy, the most relevant being additional tax revenue gains from increased economic activity under the additional amount provide. In addition, the additional amount provided will help further enhance benefits such as increases in employment, increase in export capacity and competitiveness, and multiplier effects for other parts of the economy. The regional cooperation element is similarly expected to be modest. Other BSTDB countries are important trade partners for Georgia so to the extent MSMEs benefiting from financing from the operation engage in export activities, there will be regional cooperation benefits.

Environmental Classification and Impact (summary):

Overall, it may be concluded that microfinance in general, due to its nature is not likely to generate any significant environmental and social risks and negative impacts, and instead is recognized to have positive social effects and play an important role in creation of employment opportunities and revenue generation among the lowest-income households, especially in the rural areas. The corporate SEMS applied by FINCA Bank Georgia is considered appropriate for managing the potential environmental and social risks and negative impacts associated with its micro-financing activities For the purpose of this operation, FINCA Bank Georgia will be required to continue to adhere to the established internal rules and procedures for environmental and social risk assessment; remain compliant with national environmental, labor, health and safety legislation in effect; observe the BSTDB Environmental and Social Exclusion List; and submit to the BSTDB annual environmental and social performance reports.

Operation Leader:

Financial Institutions I

E-mail:

fi1@bstdb.org