Financed ProjectsCredo LLC

Identification Code:

OP/15/0002

Total Operation Cost:

6.000.000

Maturity:

36 months

Operation Status:

Description and Purpose of the Operation:

Credo LLC

Countries of Operation:

Georgia (100,00 %)

Financial Product:

SME's

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

MSME Loan Facility to LLC "MICROFINANCE INSTITUTION CREDO"

Co-Financiers/Participants:

N/A

Guarantors/Sponsors:

N/A

Developmental and Regional Cooperation Impact:

The Project is expected to have favorable economic benefits for the Georgian economy, the most relevant being additional tax revenue gains from increased economic activity from the incremental amount inflows. In addition, the amount provided will help further enhance benefits such as increases in employment, increase in competitiveness, and multiplier effects for other parts of the economy. 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 regional cooperation element is expected to be modest but favorable. 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. The most significant impact though from BSTDB's funding, would be the mobilization of additional external resources to the benefit of the Georgian economy in general.

Environmental Classification and Impact (summary):

MSME financing is normally not likely to generate any significant negative environmental and social (E&S) impacts. There are, however certain E&S risks associated with MSMEs for which the FI needs to be capable to ensure that these are properly assessed and mitigated. The E&S Assessment of Credo LLC focused primarily on the existing E&S management system, such as policies, procedures, rules and responsibilities and how well this is integrated in the general portfolio management to ensure that the sub-loans financed are properly assessed; are compliant with the local legal requirements; and meet the requirements of the BSTDB E&S Exclusion List. The assessment concludes that the Client has instituted a basic E&S management system, which is well-functioning and which was found commensurable with the level of E&S risks associated with its MSME activities. This includes procedures for transaction screening and categorization, assessment, mitigation and control. The Borrower reported that it is not engaged in financing any activities contained in the Bank's E&S Exclusion List, and its portfolio in tobacco and alcoholic beverages (content in excess of 20%) industries is not substantial and is below the approved 10% for each industry. Overall, it is expected that the Operation will contribute to promote MSME businesses in Georgia and positively impact on poverty alleviation, stimulate self-employment, create new jobs and generate revenues. For the purpose of this operation Credo LLC will be required to continue to adhere to the established internal rules and procedures for E&S risk assessment; remain compliant with national environmental, labor, and health and safety legislation in effect; follow the BSTDB E&S Exclusion List; and submit to the Bank annual E&S performance reports.

Operation Leader:

Financial Institutions I

E-mail:

fi1@bstdb.org