A factoring first in Georgia

In a first for Georgia and the wider Caucasus region, the TFP has provided TBC Bank with a factoring facility in local currency. This means that TBC Bank is able to not just expand its domestic factoring business, but also allow small and medium-sized enterprises (SMEs) easier access to finance and, in turn, boost the country’s private sector.

The types of transactions that can be financed under this facility include food and goods distribution, transportation services, and the production and trade of construction materials.

George Tkhelidze, Deputy CEO of TBC Bank, Corporate and Investment Banking, Wealth Management, said: “As the leading supporter of businesses in Georgia, it is important for us to continuously create new development opportunities for our partner companies. The EBRD’s TFP factoring facility in local currency represents an opportunity for us to do this.

“Through factoring, we support companies involved in international trade in managing their financial resources. Although the product is relatively new for the Georgian banking sector, we hold a market-leading position with a 68 per cent share. The fact that TBC is the first bank in the region to receive a TFP factoring facility in local currency from the EBRD confirms our advanced position in the development of factoring and trade financing in general, and the EBRD’s trust in us.”

Alkis Vryenios Drakinos, EBRD Regional Director for the Caucasus, explained: “Georgia’s banking sector has often been at the forefront of financial innovation among the banking sectors of the economies where we work, offering new products for better access to finance. I am very pleased that the trend continues, and that the first factoring facility in local currency in the Caucasus is now available through TBC Bank. This new TFP factoring limit in local currency will make it possible for TBC Bank to facilitate domestic transactions and support more SMEs in Georgia.”

Factoring is relatively new throughout the Caucasus. The Covid-19 outbreak slowed its development but we are working closely with our partner banks to raise awareness and build skills through workshops, training courses and conferences.

TBC Bank has been part of our TFP family since 1999. Since then, and with TFP support, it has financed more than 1,000 trade transactions worth more than €850 million in total, including the import of LED lights to replace street lighting in Batumi and the export of green and environmentally clean buses from Georgia to Armenia.