Chinese conglomerate strikes US$10mn deal for Georgia
The International Finance Corporation (IFC) has struck a US$10m loan agreement with a Chinese private enterprise firm to inject much-needed trade finance into the SME sector of Georgia.
The loan will be provided to Basisbank, a subsidiary of China’s Hualing Group, which will on-lend trade-related working capital to Georgia’s SME exporters and importers.
In a separate agreement, the IFC provides Basisbank with a US$2mn trade finance guarantee line after it joined the IFC’s global trade finance programme (GFTP) as an issuing bank.
With a population of 3.7 million, access to finance was found to be the second greatest hurdle to carrying out business in Georgia, according to the global competitive index 2017-18 from the World Economic Forum. While this study found the country’s market is smaller than average for Eurasia, it also found low levels of business disruption from crime, corruption and foreign currency relations.
“Access to trade finance is vital for businesses that depend on cross-border trade to remain viable and seek new opportunities for growth,” says Jan van Bilsen, IFC regional manager for the South Caucasus on the loan arrangement. “Our co-operation with Basisbank is part of our wider efforts to support private sector growth in Georgia.”
Hualing Group first began development projects in Georgia in 2007 and today manages real estate, livestock industry, international trade and mining operations in the country. The Eastern European country lies on the historic Silk Road route from Europe to China.
Since Georgia joined the IFC, a member of the World Bank, in 1995, the country has received circa US$1.83bn in long-term financing for economic development.take me back