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Basisbank, SME

Georgia | Financial Institutions

Identification Code:: OP/15/0031
Total Operation Cost:: 5.000.000 USD
Maturity:: 36 months
Operation Status:: BSTDB Approved Amount – Approval Date

5.000.000 USD – 27 Nov 2015
: BSTDB Signed Amount – Signed Date

5.000.000 USD – 29 Mar 2016
: Status:
Completed
Description and Purpose of the Operation:: Basisbank, SME
Countries of Operation:: Georgia (100,00%)
Financial Product:: SME's
Sector:: Financial Institutions
Domain:: Private
Borrower/Client:: SME Loan Facility to JSC "Basisbank"
Co-Financers/Participants:: N/A
Guarantors/Sponsors:: N/A
Developmental and Regional Cooperation Impact:: This operation involves a US$ 5 million lending facility with Basisbank, for on-lending to small and medium sized enterprises (SMEs). It 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 resulting from the financing provided, increases in employment, and multiplier effects for other parts of the economy. The regional cooperation element is low, because it is not yet known who the end beneficiaries of the facility will be, but most of the SMEs are likely to be mainly oriented to the domestic market. The operation is consistent with the sectoral and operational priorities outlined in the Bank's Medium Term Strategy and Business Plan 2015-18 and the Country Strategy for Georgia 2015-2018.
Environmental Classification and Impact:: Basisbank is an existing Borrower of the BSTDB under a trade finance facility, and as part of the established working procedures each application for trade finance was submitted to BSTDB for pre- approval/screening against the Exclusion List. This was considered necessary as the Borrower did not have any E&S risk assessment procedures in place for BSTDB to rely on. However, considering that SME lines are more complex transactions where the Borrower needs to have appropriate risk assessment system in place, it is strongly recommended that Basisbank develops a minimal E&S analysis procedure and integrate it into its portfolio management. The system shall meet the requirements of BSTDB towards FIs and should allow the Borrower to: 1) ensure that all SME sub-loans financed from the BSTDB proceeds meet the Exclusion List, and the legal and regulatory requirements in effect in Georgia; 2) identify sub-loans with potential high E&S risk and impact, assess them and implement appropriate mitigation measures; and 3) translate these measures as covenants into SME credit agreements. BSTDB can assist the Borrower in developing the internal E&S management system by providing appropriate guidance and expertise.
Operation Leader:: Financial Institutions I
E-mail:: fi1@bstdb.org