Page 42 - GEORptMar21

ADB lends $3.7mn to Georgia’s Credo Bank for on-lending as farm loans
authorities to provide support, mean that government bail-outs, although still possible, can no longer be relied upon,” the rating agency commented.
The regime does not provide for a mandatory senior creditor bail-in in the case of failure, but instead states that decisions on bail-in and/or support will be at the sole discretion of the authorities, based on such considerations as broader financial market stability and the ability of the bank to continue its key operations. Fitch said this suggested that support for senior creditors was still possible, but the adoption of the resolution framework, combined with constraints on support ability, mean that the support can no longer be relied upon in the ratings agency’s view.
The Asian Development Bank (ADB) has signed a Georgian lari (GEL) 12.3mn ($3.7mn) loan agreement with Credo Bank. Under the agreement, three-year financing denominated in local currency will be used to extend loans to low-income farms and women entrepreneurs of micro, small and medium sized enterprises (MSMEs).
The financing is aimed at helping recipients successfully manage challenges posed by the COVID-19 pandemic.
Including previous deals, the ADB has so far provided a total of GEL74mn in financial and technical assistance to Credo Bank and its customers.
"I am pleased that another strategically important transaction has taken place with a long-time partner, the Asian Development Bank. The resource is intended for farmers to facilitate the production of the upcoming spring works,'' said Credo Bank general director Zaza Pirtskhelava.
"Credo Bank will significantly mitigate the negative economic impact of the COVID-19 pandemic in the regions of Georgia by supporting the activities of micro and small agricultural enterprises and women entrepreneurs. This resource will significantly contribute to the smooth running of farms and enable them to continue to contribute to the country's food supply," said Christine Engstrom, ADB's private sector director.
8.2 Central Bank policy rate
Gerogia’s central bank keeps refinancing rate at 8% for four straight time
Georgia’s central bank (the National Bank of Georgia, or NBG, on February 3 kept its key refinancing rate at 8% for the fourth consecutive time. It pointed to uncertainties in the global economic recovery and the growth rate of local lending.
The NBG’s policy-setting committee added that the need for maintaining a tight monetary stance “was apparent”. A future increase in the refinancing rate was not ruled out by the regulator.
The NBG’s monetary policy committee contended that the January annual inflation rate of 2.8% was only temporary, saying that it was related to government utility tariff subsidies.
Noted by the committee as exerting upward pressure on inflation were a significant increase in international commodity market prices, the depreciated Georgian lari (GEL) and rising COVID-19 pandemic-related production costs.
42 GEORGIA Country Report March 2021 www.intellinews.com