Page 37 - GEORptNov18

The European Investment Bank (EIB) has announced that it has extended a €30mn loan to Georgia’s largest bank TBC Bank to improve access to financing for local small and medium sized enterprises (SMEs). The loan is part of the EU4Business initiative, designed to support SMEs in the six Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). Funding within the scope of the project is expected to benefit approximately 600 Georgian SMEs.
Financial intermediation marked significant expansion over the past year in Georgia (+19.4% y/y as of August). But the banks particularly focus on mortgage lending. Robust GDP growth, at over 5% y/y in the past three quarters ending June, has contributed to higher investor confidence.
SMEs make up more than 90% of Georgian businesses and are thus a critical component of economic growth and development.
It is the EIB’s fourth loan provided to TBC Bank since 2012, with the credits totalling €85mn.
The Black Sea Trade and Development Bank (BSTDB), a regional development bank, and Bank of Georgia, the second largest lender in the country, have signed a GEL70mn (€25mn) medium-term loan for the financing of SMEs, the former announced in a press release on March 29.
TBC Bank Group PLC’s subsidiary JSC TBC Bank has signed a $50mn loan agreement with the China Development Bank (CDB), the Georgian banking group announced on August 13. TBC said the funds are intended for “general corporate purposes” and will help the bank expand its financing operations for Georgian clients primarily in the SME and micro-enterprise segments. This will include clients who directly benefit from Georgia’s increasing trade with China.
8.1.6 Bank news
Georgian state security agents arrest Iranian bureaux de change owners and workers citing “illicit” activities
Georgia’s State Security Service (SSS) has arrested several Iranian bureaux de change owners and workers, and has seized the owners’ assets, it said in a statement posted on its website on October 11.
In recent months, Georgia has stepped up its action against Iranian money market merchants who use the country as a base for international financial transfers. Georgian banks have, meanwhile, banned Iranians from holding foreign currency accounts.
The Anti-Corruption Agency and Counter-terrorism Centre of the SSS said that as a result of investigative actions conducted against Iranians residing in Georgia “illicit business activities were blocked”.
Security forces pinpointed one activity in particular, referred to as “hawala”. This involves a traditional money transfer system used in the Islamic world, where money is deposited by one side and then passed on by another party in a foreign location. Hawala has come under increasing scrutiny in recent years. It is said to not meet basic requirements of anti-money laundering laws.
SSS officers conducted searches in Tbilisi offices and homes of targeted Iranians, having obtained permission from the Georgian High Court. The operations resulted in the seizing of large amount of cash as well as "black accounting" books, the SSS said.
Security forces said they would be charging the Iranians under anti-money laundering laws. They would also be actively searching for other bureaux de change sending money through the hawala system, the SSS added.
37 GEORGIA Country Report November 2018 www.intellinews.com