Georgia: European Investment Bank extends COVID-19 support for small businesses

On 1 March, the European Investment Bank (EIB), the lending arm of the European Union, and Liberty Bank have agreed to expand an existing credit line for Georgian micro, small and medium-sized enterprises (MSMEs) via an additional €2.5 million, as part of a total package of €17.5 million.

With this signature, the EIB’s total immediate response to COVID-19 in the country comprises additional lending of over €70 million, and existing loans benefiting from COVID measures exceeding €90 million.

The EIB loans reinforce Team Europe’s support for the recovery of Georgian MSMEs from the COVID-19 pandemic and will sustain jobs, maintain liquidity and operations, and fuel the economic recovery of Georgia.

The loan agreement was signed in the presence of Charles Michel, President of the European Council, during his visit to Georgia.

“Today, the EIB has increased both the amount and the attractiveness of our loans available to MSMEs as this is the first loan that the EU bank has provided to a counterpart in Georgia in local currency,” said EIB President Werner Hoyer. “Last year alone, we boosted Georgian recovery from COVID-19 with support worth €170 million: €70 million in new lending for MSMEs, and €100 million to reinforce the national healthcare sector’s ability to deal with the pandemic.”

The investment from the EU bank forms part of the EIB’s SME Outreach Initiative, which promotes access to finance for MSMEs by supporting smaller local banks to better service their clients. The loan expansion comes with a €450,000 technical assistance component to help Liberty Bank improve and expand its offer for MSMEs.

The EU bank has been supporting the economic and social development of Georgia since 2007, providing some €1.85 billion to the local economy to date. The EU bank’s activities in the country have supported key infrastructure projects (€1 billion), MSMEs and mid-caps (€290 million), municipal infrastructure (€280 million), and green energy generation projects (€23.5 million). COVID-19 recovery activities in 2020 totalled €170 million. To date, the EU bank has invested more than €290 million in credit lines for Georgian businesses, sustaining more than 54,000 jobs in the country.

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