- The EU bank will extend Covid-measures to the existing credit line at the Liberty Bank for a total of €17.5 million, including a €2.5 million multi-currency top-up.
- Loan reinforces Team Europe support for the recovery of Georgian MSMEs from the COVID-19 pandemic as well as sustains jobs, maintains liquidity and operations, and fuels the economic recovery of Georgia.
- In 2020 alone, EIB provided €70 million to support faster recovery of Georgian businesses from COVID-19 pandemic
The European Investment Bank (EIB), the lending arm of the European Union, and Liberty Bank agreed to expand an existing credit line for Georgian micro, small and medium-sized enterprises (MSMEs) with additional €2.5 million to a total of €17.5 million. With this signature, the EIBs total Covid-19 immediate response comprises additional lending exceeding € 70 million, and existing loans benefiting from Covid measures exceeding € 90 million.
The EIB loans inject fresh capital into the national financial market at a time when the COVID-19 pandemic is burdening SMEs with liquidity issues and restricting their ability to access finance for maintaining daily operations or funding expansion plans.
The loan agreement was signed in presence Charles Michel, the President of the European Council.
Please find the video materials here: https://we.tl/t-HjPiBizZZK
EIB President Werner Hoyer, said: “Team Europe and the EIB will continue to build up our support for the Georgian MSMEs and fuel the economic and social recovery of the national economy from COVID-19. Last year alone we boosted Georgian recovery from COVID-19 with EUR 170 – 70 million in new lending for MSMES, and 100 million for the reinforcement of the national healthcare sector`s ability to deal with the pandemic. Today, the EIB increased both the amount and the attractiveness of our loans available to MSMEs, as this is the first loan the EU Bank provides to a counterpart in Georgia in local currency. We look forward maintaining our position as the trusted ally of the Republic of Georgia and a key source of support for sustainable social and economic development.”
CEO of Liberty Bank Vasil Khodeli commented: “I would like to thank EIB and the EU for their continuous support and the confidence they have shown in Liberty Bank. Thanks to the increased loan amount, Liberty Bank will unlock significant additional lending for MSMEs in Georgia. The coronavirus has hit MSMEs very hard and this facility will provide much needed support for our clients to overcome short-term liquidity shortages, maintain jobs and support economic recovery in the upcoming months. The additional multi-currency facility equivalent to GEL 10 million includes the possibility to make financing available in local currency, which provides us with greater flexibility to finance and support wider range of MSME businesses in Georgia. This is also a further sign of our commitment to help businesses of all sizes to get through the turbulent times.”
Further increasing affordability of EIB loans
The loan introduces the option to make funding available in synthetic lari, Georgia’s national currency, and increases the affordability of the loans for MSMEs. The expansion will help Georgian MSMEs sustain jobs, maintain liquidity to continue operations, and fuel the economic recovery of Georgia from the COVID-19 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. MSMEs are the backbone of the Georgian economy and major employers in the country. The loan expansion comes with a €450,000 in technical assistance to support Liberty Bank improve and expand its offer for MSMEs.
Team Europe adds value for Georgian companies
Covered by a guarantee from the European Union, the loan from the EU bank will enable increase in lending activities to MSMEs without jeopardising the long-term stability of the country’s financial sector or its ability to support the economic recovery from the pandemic in the long term.
This credit line comes with increase attractiveness to SMEs benefiting from the more flexible lending terms enabled by the EIB’s COVID-19 emergency measures. These measures are extended as part of the Team Europe’s efforts to Georgia and other EU partner countries during the pandemic.
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.
About the EIB:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
The EIB in Georgia:
The EU Bank has been supporting economic and social development of Georgia since in 2007, providing to date some EUR 1.85 billion to local economy. The EU Bank activities in the country supported key infrastructure projects (EUR 1bn), MSMEs and mid-caps (EUR 290m), Municipal infrastructure (EUR 280m) and green energy generation projects (EUR 23.5m). COVID-19 recovery activities in 2020 totalled EUR 170m.
Georgia is among a few non-EU countries eligible to benefit from the European Investment Fund (EIF) operations, designed to support small and medium enterprises (SMEs) with risk-sharing instruments. Today, the EIB Group portfolio of guarantees in Georgia cover EUR 382.9 million of SMEs loans.
The EIB finances most projects in Georgia under the EU External Lending Mandate. This provides the EIB with a guarantee covered by the EU budget for projects in the fields of social and economic infrastructure, local private sector development and climate action. Projects may also benefit from EU grants made available under the DCFTA program funded by the NIP, which amongst others promotes EIB’s efforts to make funding available in local currency.
About JSC Liberty Bank:
Liberty Bank is one of the largest Banks in Georgia, with total Assets of over GEL 2 bln and Capital GEL 200 mln. The Bank operates the largest branch network comprised of over 360 branches and 570 ATMs. The Bank is the exclusive agent of the Government of Georgia for the distribution of pensions and social benefits. The Bank employs over 4600 employees serving over 1.7 mln customers.
For more information on the EIB’s activities in Georgia please follow: https://www.eib.org/en/publications/the-european-investment-bank-in-georgia
Source: The EU Press Release
BEIJING, March. 1 (Xinhua) -- China's history-making success in poverty alleviation has gone beyond established anti-poverty theories and can provide fresh perspectives and experiences for the global fight against poverty, said a research paper released on Sunday.
The poverty reduction miracle has given birth to a new field of study, according to the report titled "Chinese Poverty Alleviation Studies: A Political Economy Perspective" released by New China Research, the think tank of Xinhua News Agency.
The report, drawing on Chinese President Xi Jinping's discourses on poverty alleviation as the ideological and theoretical foundations, decodes the "winning formula" in China's anti-poverty fight, explores the rationale behind the fight and discusses its global implications.
"Based on our national conditions and following the law of poverty reduction, China has adopted a series of extraordinary policies and measures and constructed a whole set of systems covering policy, work and institutions, blazing a poverty reduction path and forming an anti-poverty theory with Chinese characteristics," it cited Xi as saying.
The report summarized Xi's discourses on poverty alleviation as "seven upholds": upholding the leadership of the Communist Party of China (CPC), a people-centric approach, joint actions to tackle challenges, a strategy for precision, self-reliance, shared development, and a realistic and pragmatic approach.
THE "WINNING FORMULA"
Over the past eight years, China's final 98.99 million impoverished rural residents living under the current poverty line have all been lifted out of poverty. The country has met the poverty eradication target set in the United Nations' 2030 Agenda for Sustainable Development 10 years ahead of schedule.
A "winning formula" in China's poverty alleviation efforts was holding onto positive dialectical thinking and improving the pro-poor market mechanism under the guidance of the government, said the report.
In China, the "burden" of poverty has been turned into a source of potential, and human and natural resources in poor areas have become a means to achieve common development and prosperity, it said.
By capitalizing on local natural resources, many poverty-stricken areas have developed various businesses and subsequently boosted local economic growth and created job opportunities, the report finds.
From a political economy perspective, a key approach of China's poverty reduction is to maintain the goal of national common prosperity by building a "pro-poor market" in which the government, market and society jointly work to emancipate the productivity of the poor and make them contributors to growth.
In precise poverty alleviation, the "visible hand" of a capable government is not a "restless hand" but an essential "enabling hand," the report said, noting that an effective pro-poor market is not a distortion of the market, but a reconstruction of the market.
Private enterprises, social organizations, and individual citizens are the three new forces of poverty alleviation work in China, while wealthy locals, migrant workers and businessmen, and college graduates from poor areas in China have also played significant roles, the report noted.
POWERFUL CULTURAL DRIVE
Throughout China's poverty fight runs the Chinese traditional culture of helping the poor and those in need, as well as a "world sentiment" that calls for the building of a community with a shared future for humanity, according to the report.
Throughout the 5,000-year history of Chinese civilization, the idea of common prosperity has been regarded as a quality of an ideal society, it said.
China is not only a modern success, but also an outstanding ancient civilization. China must build its future without abandoning its past, observes Amartya Sen, the Nobel laureate in economics.
The report stressed that China's poverty-alleviation experience and programs, based on practice and extensive international exchanges, have not only advanced poverty alleviation and development theories, but also reflected a "world sentiment" of building a community with a shared future for humanity.
Such a "world sentiment" has long been an important value for China to follow in promoting the cause of global poverty alleviation. China is committed to reaching out to others and helping the world.
This "global view," which transcends ideology, the nation-state and political parties, is a "Chinese proposal" for promoting the cause of poverty reduction in the world, it said.
IMPLICATIONS FOR THE WORLD
Calling China a "learner, beneficiary and innovator of global poverty alleviation theories," the report summarized foreign experts' views of Chinese inspirations for the world as "5Ds:" Determined Leadership, Detailed Blueprint, Development Oriented, Data-based Governance and Decentralized Delivery.
"There is no doubt that poverty alleviation is a vivid manifestation of the leadership of the CPC," the report highlighted the top leader's determined will, which creates a strong national will and drives the allocation of resources, as well as the leadership of the 91-million-member CPC.
With the common goal of eradicating absolute poverty, several generations of Chinese leaderships have drawn strategic blueprints and led the nation in successive struggles, which ensured policy continuity and spurred the entire country to work together toward a unified goal.
Meanwhile, China has long prioritized economic development in its poverty fight, which is combined with proactive, precise poverty reduction practices that directly pass on the benefits of economic development to every poor household and eliminate poverty completely.
In the fight against poverty, the Chinese government has also attached particular importance to the development of big data and the digital economy and emphasized the application of advanced digital management, which made China's poverty alleviation success possible in a relatively short period of time.
Last but not least, the report attributed the effective implementation of poverty alleviation policies to the "decentralized" nature of China's governance structure, featuring many improvisations at subnational levels to implement national policies.
Besides experience sharing, China has committed itself to the global combat against absolute poverty by participating in assistance programs, supporting "capacity development" projects and advocating a shared-solutions approach, according to the report.
"China, based on its own experience and theoretical ideas in poverty alleviation, is giving back to the human cause of ending poverty and providing a new reference for other countries and regions," it said.