Georgian Bank Launched Crediting for Azerbaijan’s Non-Bank Credit Organization

Business Materials 27 November 2008 14:58 (UTC +04:00)

Azerbaijan, Baku, November 27/ Trend , corr N. Ismayilova/ "TBC Credit non-bank credit organization were granted first credit from the key shareholder - Georgian TBC Bank," deputy director general of the credit organization Azhdar Aliyev said. The amount of the credit granted for the organization is not revealed.

The credit will be mainly spent on granting business credits and part of it will be used for consumer credits.

"I have achieved progress in talks with foreign investors. We are likely to be granted credits at the beginning of next year," Aliyev said.

He said talks with a number of foreign creditors were suspended as they face hardships because of a global financial crisis. Aliyev did not reveal with which organization the company is holding talks at present.

Today uncertainty also exists in the talks with the negotiation process with the European Bank for Reconstruction and Development (EBRD) and American Overcies Provide Investment Company (OPIC), which were ready to finance Azerbaijani credit organization in 2008. The EBRD postponed negotiations with TBC Credit for opening credit line until the stabilization of situation in Georgia, since its basic shareholder is Georgian TBC Bank. However, OPIC cancelled the negotiations until approval of its budget in October, but as mentioned, this year, financing is not expected to be obtained from this company.

Negotiations on the attraction of external financing were conducted with EBRD and OPIC, since TBC Credit did not hope to attract funds from other international organizations this year due to large number of appeals by the Azerbaijani banks, which also faced the problem of liquidity.

Because of absence of foreign debts, TBC Bank has to correct its plans for 2008 as it was impossible to increase the credit portfolio to the planned $30mln. It will not be possible to attract planned $30-$40mln by the end of 2008. At present, TBC credits amount to $10mln.

Credit portfolio of the organization totals to $10mln, 10% of which is meant for consumer credits, 45% - mortgage lending and 45% - business credits.

OPIC is a state-owned US organization on foreign investments which began financing of SOA Credit in 2004. First credit worth $2.5mln was granted for seven year term, second - $7.5mln with 9.5 year term. The last credit was granted and completely spent in 2007.

OPIC funds were used to finance business credits and mortgage program of credit organization.

In 2007 EBRD, granted $2mln loan for the development of micro and medium businesses in Azerbaijan.

In 2008, the Bank has not yet borrowed foreign debts excluding credit from the Georgian bank.

The basic founder of TBC Credit is Georgian TBC Bank, which owns 75% of shares, and 25% belongs to international consulting firm Shorebank International, which is part of the American group of Shorebank. Shorebank founded TBC Credit in 2000.

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