OREANDA-NEWS.The EBRD is providing a $6 million credit line for Georgia's Basisbank to support its lending to micro, small and medium-sized enterprises (MSME). This is EBRD's first project with Basisbank, the EBRD press centre reports. The credit line will contribute to the further development of the Georgian banking system by delivering MSME finance on a large and sustainable scale.

Established in 1993, the "Basisbank" Bank currently has 15 service centres, three of which are located in the regions. This privately owned bank has successfully established an image of a reliable, reputable and dynamically growing bank. The five-year loan from EBRD will allow Basisbank to meet the increasing demand for medium-term funding from MSMEs, addressing a major obstacle to growth of this segment of the economy. Sub-loans will be up to $500,000 for SMEs and under $10,000 for MSEs.

This credit line comes under the EBRD's Georgian Financial Sector Framework Facility and reflects the EBRD's strategy that aims to strengthen competition in the financial sector, addressing identified gaps and weaknesses and promoting best practice. EBRD's Early Transition Countries Multi-Donor Fund will assist in training the staff and helping to ensure that Basisbank builds up a diversified and quality loan portfolio.

"The EBRD remains one of the key providers of medium-term finance to the Georgian banking sector. This project will allow smaller companies to receive swift access to reliable finance based on their entrepreneurial skills and the success of their business," Michael Davey, EBRD Director for Caucasus, Moldova & Belarus, said at the signing.

"The activity carried out by the EBRD in Georgia is very important for Georgia and especially for the Georgian banking sector. Although this sector is growing very fast and is the strongest aspect of the Georgian economy, it still needs an external support. The cooperation established between the EBRD and Basisbank will enable EBRD to share in the invaluable experience of this Institution. The credit line will, moreover, allow more enterprises to improve their businesses," Zurab Tsikhistavi, Basisbank Director General stated.

Georgia is part of the EBRD's Early Transition Countries Initiative (ETCI). Launched in 2004, the Bank assumes higher levels of risk in the projects it finances in the ETCI countries, while still respecting the principles of sound banking. The EBRD, one of the largest private sector investors in Georgia, has to-date signed a total of 72 investment projects in the country covering energy, transport, agribusiness, general industry and banking for a total commitment of almost 400 million.