IFC eyes $200 million financing for Bank of Georgia to expand MSME lending

The International Finance Corporation (IFC) is considering a $200 million financing package for Bank of Georgia aimed at expanding lending to micro, small and medium-sized enterprises (MSMEs), particularly in underserved and rural segments of the economy.

The proposed investment, which could take the form of a senior loan or a local currency bond with a tenor of up to five years, will be disbursed in Georgian lari. The structure is designed to strengthen the bank’s capacity to extend long-term credit while addressing persistent funding mismatches in the local financial system.

Expanding access to MSME financing
The initiative will support on-lending to MSMEs across key sectors including agriculture, trade, services, construction, tourism and real estate management.

At least 35% of the total financing is earmarked for rural enterprises, reflecting IFC’s focus on bridging geographic disparities in access to finance.

By targeting underserved businesses, the investment is expected to enhance financial inclusion, unlock productivity, and stimulate job creation across Georgia’s evolving economic landscape.

Strengthening local currency lending
IFC’s participation is expected to provide scarce long-term local currency funding, enabling Bank of Georgia to extend longer-tenor loans to small businesses.

This is particularly critical in emerging markets, where access to stable, long-duration capital remains limited. Beyond direct financing, the project is expected to catalyze broader market activity by encouraging other financial institutions to scale up MSME lending and deepen credit penetration.

Strengthening sustainable banking practices
Founded in 1994 and headquartered in Tbilisi, Bank of Georgia is the country’s leading financial institution, serving more than 2 million retail customers and over 122,000 businesses. With total assets of $15.1 billion and an equity base of $2.6 billion as of mid-2025, the bank plays a systemically important role in Georgia’s financial ecosystem. It operates as a key subsidiary of Lion Finance Group PLC, which is listed on the London Stock Exchange.

The proposed investment aligns with IFC’s Access to Information Policy and broader strategy to promote inclusive and sustainable growth. By combining financing with advisory support, IFC aims to strengthen the resilience of Georgia’s MSME sector while fostering responsible lending practices. If approved, the project could serve as a model for scaling MSME financing across emerging markets, reinforcing the role of development finance in bridging credit gaps and driving economic transformation.